110 HR 1012 IH: Small Business Growth Act of
U.S. House of Representatives
2007-02-13
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title and table of
contents
(a)This Act may be cited
as the Small Business Growth Act of
2007
.
(b)The table of contents is as follows:
Sec. 1. Short title and table of contents.
Title I—Association Health Plans
Sec. 101. Rules governing association health
plans.
Part 8—Rules Governing Association Health Plans
Sec. 801. Association health plans.
Sec. 802. Certification of association health
plans.
Sec. 803. Requirements relating to sponsors and boards of
trustees.
Sec. 804. Participation and coverage requirements.
Sec. 805. Other requirements relating to plan documents,
contribution rates, and benefit options.
Sec. 806. Maintenance of reserves and provisions for solvency
for plans providing health benefits in addition to health insurance
coverage.
Sec. 807. Requirements for application and related
requirements.
Sec. 808. Notice requirements for voluntary
termination.
Sec. 809. Corrective actions and mandatory
termination.
Sec. 810. Trusteeship by the Secretary of insolvent association
health plans providing health benefits in addition to health insurance
coverage.
Sec. 811. State assessment authority.
Sec. 812. Definitions and rules of
construction.
Sec. 102. Clarification of treatment of single employer
arrangements.
Sec. 103. Enforcement provisions relating to association health
plans.
Sec. 104. Cooperation between Federal and State
authorities.
Sec. 105. Effective date and transitional and other
rules.
Title II—Extension of increased expensing
Sec. 201. Extension of increased expensing for small
businesses.
Title III—Paperwork requirements
Sec. 301. Suspension of fines for first-time paperwork
violations by small business concerns.
Title IV—Federal Rules of Civil Procedure
improvements
Sec. 401. Attorney accountability.
Sec. 402. Applicability of Rule 11 to State cases affecting
interstate commerce.
Sec. 403. Prevention of forum-shopping.
Sec. 404. Rule of construction.
Sec. 405. Three-strikes rule for suspending attorneys who
commit multiple Rule 11 violations.
Sec. 406. Presumption of rule 11 violation for repeatedly
relitigating same issue.
Sec. 407. Enhanced sanctions for document destruction in
pending Federal court proceedings.
Sec. 408. Ban on concealment of unlawful conduct.
Title V—Awarding of procurement contracts
Sec. 501. Increase in government-wide goal for procurement
contracts awarded to small business concerns.
<enum>I</enum><header>Association Health
Plans</header>
<section id="H7230FBB4639C45D0926DB3FEF16FA23"><enum>101.</enum><header>Rules governing
association health plans</header>
<subsection id="HE755C278E3D841AE949F71A07DF73722"><enum>(a)</enum><header>In
General</header><text>Subtitle B of title I of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> is amended by adding after part 7 the following new
part:</text>
<quoted-block act-name="Employee" id="H8012F1C450CA476DA0E1E69BEC1D7235" style="OLC">
<part id="H3454141809CA47A7831DC10171CB18EE"><enum>8</enum><header>RULES GOVERNING
ASSOCIATION HEALTH PLANS</header>
<section id="H2FC92C505A3346A28FDD9E7494744C62"><enum>801.</enum><header>Association
health plans</header>
<subsection id="H4E2397A5161C4C9F9BD356B82B9EBB9C"><enum>(a)</enum><header>In
General</header><text>For purposes of this part, the term <term>association
health plan</term> means a group health plan whose sponsor is (or is deemed
under this part to be) described in subsection (b).</text>
</subsection><subsection id="HB4BD09B4162F43EB82432E5CD410488F"><enum>(b)</enum><header>Sponsorship</header><text>The
sponsor of a group health plan is described in this subsection if such
sponsor—</text>
<paragraph id="H302A02E7656B46219877C3004F27C9D4"><enum>(1)</enum><text>is organized and
maintained in good faith, with a constitution and bylaws specifically stating
its purpose and providing for periodic meetings on at least an annual basis, as
a bona fide trade association, a bona fide industry association (including a
rural electric cooperative association or a rural telephone cooperative
association), a bona fide professional association, or a bona fide chamber of
commerce (or similar bona fide business association, including a corporation or
similar organization that operates on a cooperative basis (within the meaning
of <external-xref legal-doc="usc" parsable-cite="usc/26/1381">section 1381</external-xref> of the Internal Revenue Code of 1986)), for substantial
purposes other than that of obtaining or providing medical care;</text>
</paragraph><paragraph id="H9A56E200D40540BA90D66F6276ACBC36"><enum>(2)</enum><text>is established as
a permanent entity which receives the active support of its members and
requires for membership payment on a periodic basis of dues or payments
necessary to maintain eligibility for membership in the sponsor; and</text>
</paragraph><paragraph id="H3AD56CCD6AAE43249888A1EAE95FA62"><enum>(3)</enum><text>does not condition
membership, such dues or payments, or coverage under the plan on the basis of
health status-related factors with respect to the employees of its members (or
affiliated members), or the dependents of such employees, and does not
condition such dues or payments on the basis of group health plan
participation.</text>
</paragraph><continuation-text continuation-text-level="subsection">Any
sponsor consisting of an association of entities which meet the requirements of
paragraphs (1), (2), and (3) shall be deemed to be a sponsor described in this
subsection.</continuation-text></subsection></section><section id="H5F5FEB739D2E41F282324895FE73DBC"><enum>802.</enum><header>Certification of
association health plans</header>
<subsection id="H1BDB00B34FD145B8B5345FF7DACE92EC"><enum>(a)</enum><header>In
General</header><text>The applicable authority shall prescribe by regulation a
procedure under which, subject to subsection (b), the applicable authority
shall certify association health plans which apply for certification as meeting
the requirements of this part.</text>
</subsection><subsection id="HB1AB68870A0A46DE8C81210026207B22"><enum>(b)</enum><header>Standards</header><text>Under
the procedure prescribed pursuant to subsection (a), in the case of an
association health plan that provides at least one benefit option which does
not consist of health insurance coverage, the applicable authority shall
certify such plan as meeting the requirements of this part only if the
applicable authority is satisfied that the applicable requirements of this part
are met (or, upon the date on which the plan is to commence operations, will be
met) with respect to the plan.</text>
</subsection><subsection id="H25CA2A2C1D054490A9B718859665DED"><enum>(c)</enum><header>Requirements
Applicable to Certified Plans</header><text>An association health plan with
respect to which certification under this part is in effect shall meet the
applicable requirements of this part, effective on the date of certification
(or, if later, on the date on which the plan is to commence operations).</text>
</subsection><subsection id="HA97DC429ED1A45958CA686E763E707A0"><enum>(d)</enum><header>Requirements for
Continued Certification</header><text>The applicable authority may provide by
regulation for continued certification of association health plans under this
part.</text>
</subsection><subsection id="H11381CC9D6A14E63AA1B4DF3DA686D00"><enum>(e)</enum><header>Class
Certification for Fully Insured Plans</header><text>The applicable authority
shall establish a class certification procedure for association health plans
under which all benefits consist of health insurance coverage. Under such
procedure, the applicable authority shall provide for the granting of
certification under this part to the plans in each class of such association
health plans upon appropriate filing under such procedure in connection with
plans in such class and payment of the prescribed fee under section
807(a).</text>
</subsection><subsection id="HC4B70EB68D5A4C75B6F0F6CA54E8E8BD"><enum>(f)</enum><header>Certification of
Self-Insured Association Health Plans</header><text>An association health plan
which offers one or more benefit options which do not consist of health
insurance coverage may be certified under this part only if such plan consists
of any of the following:</text>
<paragraph id="H92321ABCBBBF43469324279B44D500F8"><enum>(1)</enum><text>a plan which
offered such coverage on the date of the enactment of the
<short-title>Small Business Growth Act of
2007</short-title>,</text>
</paragraph><paragraph id="H6CCDA4E6B8494D338C08ABCE06BAC751"><enum>(2)</enum><text>a plan under which
the sponsor does not restrict membership to one or more trades and businesses
or industries and whose eligible participating employers represent a broad
cross-section of trades and businesses or industries, or</text>
</paragraph><paragraph id="HEA29674D06904CD6B965A80649249875"><enum>(3)</enum><text>a plan whose
eligible participating employers represent one or more trades or businesses, or
one or more industries, consisting of any of the following: agriculture;
equipment and automobile dealerships; barbering and cosmetology; certified
public accounting practices; child care; construction; dance, theatrical and
orchestra productions; disinfecting and pest control; financial services;
fishing; food service establishments; hospitals; labor organizations; logging;
manufacturing (metals); mining; medical and dental practices; medical
laboratories; professional consulting services; sanitary services;
transportation (local and freight); warehousing; wholesaling/distributing; or
any other trade or business or industry which has been indicated as having
average or above-average risk or health claims experience by reason of State
rate filings, denials of coverage, proposed premium rate levels, or other means
demonstrated by such plan in accordance with regulations.</text>
</paragraph></subsection></section><section id="H00FADAE00408482590CABA4D34E7FD6E"><enum>803.</enum><header>Requirements
relating to sponsors and boards of trustees</header>
<subsection id="H61D1AB7C77394C47A7D38478E0134910"><enum>(a)</enum><header>Sponsor</header><text>The
requirements of this subsection are met with respect to an association health
plan if the sponsor has met (or is deemed under this part to have met) the
requirements of section 801(b) for a continuous period of not less than 3 years
ending with the date of the application for certification under this
part.</text>
</subsection><subsection id="HA7EA12F342CA47B8B2B0EA92888E39C8"><enum>(b)</enum><header>Board of
Trustees</header><text>The requirements of this subsection are met with respect
to an association health plan if the following requirements are met:</text>
<paragraph id="H47AB0B445E364E80BC98FF5C0080FE2C"><enum>(1)</enum><header>Fiscal
control</header><text>The plan is operated, pursuant to a trust agreement, by a
board of trustees which has complete fiscal control over the plan and which is
responsible for all operations of the plan.</text>
</paragraph><paragraph id="HC534664924BE4192A873C25158FB897D"><enum>(2)</enum><header>Rules of
operation and financial controls</header><text>The board of trustees has in
effect rules of operation and financial controls, based on a 3-year plan of
operation, adequate to carry out the terms of the plan and to meet all
requirements of this title applicable to the plan.</text>
</paragraph><paragraph id="HBC92921AC29A4699B17900C4F89F4300"><enum>(3)</enum><header>Rules governing
relationship to participating employers and to contractors</header>
<subparagraph id="H9DF329D2DB5A4E8995539000023B7845"><enum>(A)</enum><header>Board
membership</header>
<clause id="H11F52E2739B34BD4A7AB8BEE40C1BDCC"><enum>(i)</enum><header>In
general</header><text>Except as provided in clauses (ii) and (iii), the members
of the board of trustees are individuals selected from individuals who are the
owners, officers, directors, or employees of the participating employers or who
are partners in the participating employers and actively participate in the
business.</text>
</clause><clause id="H7CDE7B4F6C5B4A6182E3CFD3A6D14931"><enum>(ii)</enum><header>Limitation</header>
<subclause id="HB8871F02D0D54ADDBA63FE319107D699"><enum>(I)</enum><header>General
rule</header><text>Except as provided in subclauses (II) and (III), no such
member is an owner, officer, director, or employee of, or partner in, a
contract administrator or other service provider to the plan.</text>
</subclause><subclause id="H35CCF92211B2463E99046BBFD6D851E1"><enum>(II)</enum><header>Limited
exception for providers of services solely on behalf of the
sponsor</header><text>Officers or employees of a sponsor which is a service
provider (other than a contract administrator) to the plan may be members of
the board if they constitute not more than 25 percent of the membership of the
board and they do not provide services to the plan other than on behalf of the
sponsor.</text>
</subclause><subclause id="HE06ACB7CFF1949AA81D30058D0003C7E"><enum>(III)</enum><header>Treatment of
providers of medical care</header><text>In the case of a sponsor which is an
association whose membership consists primarily of providers of medical care,
subclause (I) shall not apply in the case of any service provider described in
subclause (I) who is a provider of medical care under the plan.</text>
</subclause></clause><clause id="H77F1EC6A33E24F1600526BE3B06D189"><enum>(iii)</enum><header>Certain plans
excluded</header><text>Clause (i) shall not apply to an association health plan
which is in existence on the date of the enactment of the
<short-title>Small Business Growth Act of
2007</short-title>.</text>
</clause></subparagraph><subparagraph id="HDF00E8E263664199AE45D4FC32B3C4D"><enum>(B)</enum><header>Sole
authority</header><text>The board has sole authority under the plan to approve
applications for participation in the plan and to contract with a service
provider to administer the day-to-day affairs of the plan.</text>
</subparagraph></paragraph></subsection><subsection id="HCDC55DEB33E44589966B4287352F7FD4"><enum>(c)</enum><header>Treatment of
Franchise Networks</header><text>In the case of a group health plan which is
established and maintained by a franchiser for a franchise network consisting
of its franchisees—</text>
<paragraph id="HE0ED631FF0F94987A1416D742D1200D3"><enum>(1)</enum><text>the requirements
of subsection (a) and section 801(a) shall be deemed met if such requirements
would otherwise be met if the franchiser were deemed to be the sponsor referred
to in section 801(b), such network were deemed to be an association described
in section 801(b), and each franchisee were deemed to be a member (of the
association and the sponsor) referred to in section 801(b); and</text>
</paragraph><paragraph id="HAAC53E15427A4355A979286E114E2FD"><enum>(2)</enum><text>the requirements of
section 804(a)(1) shall be deemed met.</text>
</paragraph><continuation-text continuation-text-level="subsection">The
Secretary may by regulation define for purposes of this subsection the terms
<quote>franchiser</quote>, <quote>franchise network</quote>, and
<quote>franchisee</quote>.</continuation-text></subsection></section><section id="H35399CAD6CDA4D61933048181D5BF141"><enum>804.</enum><header>Participation
and coverage requirements</header>
<subsection id="HA48870FC90644DE2008D07AFF1955EC6"><enum>(a)</enum><header>Covered
Employers and Individuals</header><text>The requirements of this subsection are
met with respect to an association health plan if, under the terms of the
plan—</text>
<paragraph id="H42E6277F93DC452B80AE6B07A31C35B2"><enum>(1)</enum><text>each participating
employer must be—</text>
<subparagraph id="HE7CE6684278249F2983F00547300C62B"><enum>(A)</enum><text>a member of the
sponsor,</text>
</subparagraph><subparagraph id="HC53D4118B1654CC78F10A7DE85C3C40"><enum>(B)</enum><text>the sponsor,
or</text>
</subparagraph><subparagraph id="H5C2CE7E3C0D6465C000030E8DC00D600"><enum>(C)</enum><text>an affiliated
member of the sponsor with respect to which the requirements of subsection (b)
are met,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">except
that, in the case of a sponsor which is a professional association or other
individual-based association, if at least one of the officers, directors, or
employees of an employer, or at least one of the individuals who are partners
in an employer and who actively participates in the business, is a member or
such an affiliated member of the sponsor, participating employers may also
include such employer; and</continuation-text></paragraph><paragraph id="H75FC7D12FB8E46309576A9C3A3985E83"><enum>(2)</enum><text>all individuals
commencing coverage under the plan after certification under this part must
be—</text>
<subparagraph id="H5908DCF770AD40A088BE004DC9E0E2AA"><enum>(A)</enum><text>active or retired
owners (including self-employed individuals), officers, directors, or employees
of, or partners in, participating employers; or</text>
</subparagraph><subparagraph id="H71E722FBE78841C48B4FF5FE03DB0413"><enum>(B)</enum><text>the beneficiaries
of individuals described in subparagraph (A).</text>
</subparagraph></paragraph></subsection><subsection id="H3089C65B1CBC492FA300ADD0D24B6430"><enum>(b)</enum><header>Coverage of
Previously Uninsured Employees</header><text>In the case of an association
health plan in existence on the date of the enactment of the
<short-title>Small Business Growth Act of
2007</short-title>, an affiliated member of the sponsor of the plan may be
offered coverage under the plan as a participating employer only if—</text>
<paragraph id="H6FDEF5EC6D5D419E9EB31E1530F8DF7E"><enum>(1)</enum><text>the affiliated
member was an affiliated member on the date of certification under this part;
or</text>
</paragraph><paragraph id="H51E892C4E2D54735A3BF046F23174739"><enum>(2)</enum><text>during the
12-month period preceding the date of the offering of such coverage, the
affiliated member has not maintained or contributed to a group health plan with
respect to any of its employees who would otherwise be eligible to participate
in such association health plan.</text>
</paragraph></subsection><subsection id="H24241DA1C9794C6A81CF1B45956E12BD"><enum>(c)</enum><header>Individual
Market Unaffected</header><text>The requirements of this subsection are met
with respect to an association health plan if, under the terms of the plan, no
participating employer may provide health insurance coverage in the individual
market for any employee not covered under the plan which is similar to the
coverage contemporaneously provided to employees of the employer under the
plan, if such exclusion of the employee from coverage under the plan is based
on a health status-related factor with respect to the employee and such
employee would, but for such exclusion on such basis, be eligible for coverage
under the plan.</text>
</subsection><subsection id="HC3CE813D25014C59AC3322F302E14771"><enum>(d)</enum><header>Prohibition of
Discrimination Against Employers and Employees Eligible to
Participate</header><text>The requirements of this subsection are met with
respect to an association health plan if—</text>
<paragraph id="H899ABDF5EDF248EBB7118860BF59695F"><enum>(1)</enum><text>under the terms of
the plan, all employers meeting the preceding requirements of this section are
eligible to qualify as participating employers for all geographically available
coverage options, unless, in the case of any such employer, participation or
contribution requirements of the type referred to in section 2711 of the
<act-name parsable-cite="PHSA">Public Health Service Act</act-name> are not
met;</text>
</paragraph><paragraph id="HDE777702336C437E996C8F7C84AA97BB"><enum>(2)</enum><text>upon request, any
employer eligible to participate is furnished information regarding all
coverage options available under the plan; and</text>
</paragraph><paragraph id="H3CCCC4F0B19A419C8173A621229E8897"><enum>(3)</enum><text>the applicable
requirements of sections 701, 702, and 703 are met with respect to the
plan.</text>
</paragraph></subsection></section><section id="HB325A15E77EC4699B780BC58E14BEDA"><enum>805.</enum><header>Other
requirements relating to plan documents, contribution rates, and benefit
options</header>
<subsection id="H22C3F6040B9247F2B300F8E5C63252BB"><enum>(a)</enum><header>In
General</header><text>The requirements of this section are met with respect to
an association health plan if the following requirements are met:</text>
<paragraph id="H687B0F6322D64864B7B01D91FFC8BD5C"><enum>(1)</enum><header>Contents of
governing instruments</header><text>The instruments governing the plan include
a written instrument, meeting the requirements of an instrument required under
section 402(a)(1), which—</text>
<subparagraph id="H1DBCBA7B76A443BFB381E7E075000054"><enum>(A)</enum><text>provides that the
board of trustees serves as the named fiduciary required for plans under
section 402(a)(1) and serves in the capacity of a plan administrator (referred
to in section 3(16)(A));</text>
</subparagraph><subparagraph id="H4C793B90BAC045FD006D09882CCE681C"><enum>(B)</enum><text>provides that the
sponsor of the plan is to serve as plan sponsor (referred to in section
3(16)(B)); and</text>
</subparagraph><subparagraph id="H02EF3F56194743C8A6DD8534D924F57"><enum>(C)</enum><text>incorporates the
requirements of section 806.</text>
</subparagraph></paragraph><paragraph id="H37AD30D26FC142F0AC15017CE15BA5FC"><enum>(2)</enum><header>Contribution
rates must be nondiscriminatory</header>
<subparagraph id="H0AD40602EEF5443585F8A44CD217C06C"><enum>(A)</enum><text>The contribution
rates for any participating small employer do not vary on the basis of any
health status-related factor in relation to employees of such employer or their
beneficiaries and do not vary on the basis of the type of business or industry
in which such employer is engaged.</text>
</subparagraph><subparagraph id="HFC0932AFF1364119A1493900AEA6DD53"><enum>(B)</enum><text>Nothing in this
title or any other provision of law shall be construed to preclude an
association health plan, or a health insurance issuer offering health insurance
coverage in connection with an association health plan, from—</text>
<clause id="H919AD94FA98742D99EB0EFC49F5779B7"><enum>(i)</enum><text>setting
contribution rates based on the claims experience of the plan; or</text>
</clause><clause id="H3EC669C6CEAB490A99A06FBBC3A26395"><enum>(ii)</enum><text>varying
contribution rates for small employers in a State to the extent that such rates
could vary using the same methodology employed in such State for regulating
premium rates in the small group market with respect to health insurance
coverage offered in connection with bona fide associations (within the meaning
of section 2791(d)(3) of the <act-name parsable-cite="PHSA">Public Health
Service Act</act-name>),</text>
</clause><continuation-text continuation-text-level="subparagraph">subject
to the requirements of section 702(b) relating to contribution rates.</continuation-text></subparagraph></paragraph><paragraph id="HB0665592F8484D94ACC1E21B9321CF11"><enum>(3)</enum><header>Floor for number
of covered individuals with respect to certain plans</header><text>If any
benefit option under the plan does not consist of health insurance coverage,
the plan has as of the beginning of the plan year not fewer than 1,000
participants and beneficiaries.</text>
</paragraph><paragraph id="H3ECE874AC17A4606917E678DECCAF0CD"><enum>(4)</enum><header>Marketing
requirements</header>
<subparagraph id="H5E11971BA009427A9E90770065A7C0D6"><enum>(A)</enum><header>In
general</header><text>If a benefit option which consists of health insurance
coverage is offered under the plan, State-licensed insurance agents shall be
used to distribute to small employers coverage which does not consist of health
insurance coverage in a manner comparable to the manner in which such agents
are used to distribute health insurance coverage.</text>
</subparagraph><subparagraph id="HC3ABA7C96AC44DFBBF957D1000FB143B"><enum>(B)</enum><header>State-licensed
insurance agents</header><text>For purposes of subparagraph (A), the term
<term>State-licensed insurance agents</term> means one or more agents who are
licensed in a State and are subject to the laws of such State relating to
licensure, qualification, testing, examination, and continuing education of
persons authorized to offer, sell, or solicit health insurance coverage in such
State.</text>
</subparagraph></paragraph><paragraph id="H7344B2129DFB447C975B533D057688BB"><enum>(5)</enum><header>Regulatory
requirements</header><text>Such other requirements as the applicable authority
determines are necessary to carry out the purposes of this part, which shall be
prescribed by the applicable authority by regulation.</text>
</paragraph></subsection><subsection id="H576C3FF502D14219B1E03CE77589B62E"><enum>(b)</enum><header>Ability of
Association Health Plans to Design Benefit Options</header><text>Subject to
section 514(d), nothing in this part or any provision of State law (as defined
in section 514(c)(1)) shall be construed to preclude an association health
plan, or a health insurance issuer offering health insurance coverage in
connection with an association health plan, from exercising its sole discretion
in selecting the specific items and services consisting of medical care to be
included as benefits under such plan or coverage, except (subject to section
514) in the case of (1) any law to the extent that it is not preempted under
section 731(a)(1) with respect to matters governed by section 711, 712, or 713,
or (2) any law of the State with which filing and approval of a policy type
offered by the plan was initially obtained to the extent that such law
prohibits an exclusion of a specific disease from such coverage.</text>
</subsection></section><section id="H2FCFC94ADFCB4E8D92A300E95A6CED"><enum>806.</enum><header>Maintenance of
reserves and provisions for solvency for plans providing health benefits in
addition to health insurance coverage</header>
<subsection id="HFB818CF23B594BF2AFA5E0B6B153F01"><enum>(a)</enum><header>In
General</header><text>The requirements of this section are met with respect to
an association health plan if—</text>
<paragraph id="HECBEDD5E96764AD6BA6F00E6900DFFD"><enum>(1)</enum><text>the benefits under
the plan consist solely of health insurance coverage; or</text>
</paragraph><paragraph id="HFEF27F3440A848358328BA7875277100"><enum>(2)</enum><text>if the plan
provides any additional benefit options which do not consist of health
insurance coverage, the plan—</text>
<subparagraph id="H1B39D2642FB44B838B00839B287EFE87"><enum>(A)</enum><text>establishes and
maintains reserves with respect to such additional benefit options, in amounts
recommended by the qualified actuary, consisting of—</text>
<clause id="H7FB76F117018431DAB8743AA4EF063AA"><enum>(i)</enum><text>a
reserve sufficient for unearned contributions;</text>
</clause><clause id="HA51ED839CDC3463989C54C1F4C5300A7"><enum>(ii)</enum><text>a
reserve sufficient for benefit liabilities which have been incurred, which have
not been satisfied, and for which risk of loss has not yet been transferred,
and for expected administrative costs with respect to such benefit
liabilities;</text>
</clause><clause id="H70B5642C5F3540C4A855B1ED095DDAEB"><enum>(iii)</enum><text>a reserve
sufficient for any other obligations of the plan; and</text>
</clause><clause id="HA3D49AE3A3CC4DED914936FE7B41AC2E"><enum>(iv)</enum><text>a
reserve sufficient for a margin of error and other fluctuations, taking into
account the specific circumstances of the plan; and</text>
</clause></subparagraph><subparagraph id="H183B8DF2BBC04A49973C9B3133D9929"><enum>(B)</enum><text>establishes and
maintains aggregate and specific excess/stop loss insurance and solvency
indemnification, with respect to such additional benefit options for which risk
of loss has not yet been transferred, as follows:</text>
<clause id="H7E7CC6D3FE9B4B23AA6FDDB43790DAAC"><enum>(i)</enum><text>The plan shall
secure aggregate excess/stop loss insurance for the plan with an attachment
point which is not greater than 125 percent of expected gross annual claims.
The applicable authority may by regulation provide for upward adjustments in
the amount of such percentage in specified circumstances in which the plan
specifically provides for and maintains reserves in excess of the amounts
required under subparagraph (A).</text>
</clause><clause id="HABE5CDE577DD49D49C0955091FDEC79F"><enum>(ii)</enum><text>The plan shall
secure specific excess/stop loss insurance for the plan with an attachment
point which is at least equal to an amount recommended by the plan’s qualified
actuary. The applicable authority may by regulation provide for adjustments in
the amount of such insurance in specified circumstances in which the plan
specifically provides for and maintains reserves in excess of the amounts
required under subparagraph (A).</text>
</clause><clause id="H1FD37F27EC974F38AC11A235BB300E5"><enum>(iii)</enum><text>The plan shall
secure indemnification insurance for any claims which the plan is unable to
satisfy by reason of a plan termination.</text>
</clause></subparagraph></paragraph><continuation-text continuation-text-level="subsection">Any
person issuing to a plan insurance described in clause (i), (ii), or (iii) of
subparagraph (B) shall notify the Secretary of any failure of premium payment
meriting cancellation of the policy prior to undertaking such a cancellation.
Any regulations prescribed by the applicable authority pursuant to clause (i)
or (ii) of subparagraph (B) may allow for such adjustments in the required
levels of excess/stop loss insurance as the qualified actuary may recommend,
taking into account the specific circumstances of the plan.</continuation-text></subsection><subsection id="H216795DA36094EC487B8CA699761F940"><enum>(b)</enum><header>Minimum Surplus
in Addition to Claims Reserves</header><text>In the case of any association
health plan described in subsection (a)(2), the requirements of this subsection
are met if the plan establishes and maintains surplus in an amount at least
equal to—</text>
<paragraph id="HC35CA48F14A5486FBE73378410AA75D5"><enum>(1)</enum><text>$500,000,
or</text>
</paragraph><paragraph id="HC125D8D4D99441529CB2EA2095AB0020"><enum>(2)</enum><text>such greater
amount (but not greater than $2,000,000) as may be set forth in regulations
prescribed by the applicable authority, considering the level of aggregate and
specific excess/stop loss insurance provided with respect to such plan and
other factors related to solvency risk, such as the plan’s projected levels of
participation or claims, the nature of the plan’s liabilities, and the types of
assets available to assure that such liabilities are met.</text>
</paragraph></subsection><subsection id="H719734A4DBC7423EB0C67002634D075E"><enum>(c)</enum><header>Additional
Requirements</header><text>In the case of any association health plan described
in subsection (a)(2), the applicable authority may provide such additional
requirements relating to reserves, excess/stop loss insurance, and
indemnification insurance as the applicable authority considers appropriate.
Such requirements may be provided by regulation with respect to any such plan
or any class of such plans.</text>
</subsection><subsection id="H405CBE6FFE41479C94CBD500B1005F34"><enum>(d)</enum><header>Adjustments for
Excess/Stop Loss Insurance</header><text>The applicable authority may provide
for adjustments to the levels of reserves otherwise required under subsections
(a) and (b) with respect to any plan or class of plans to take into account
excess/stop loss insurance provided with respect to such plan or plans.</text>
</subsection><subsection id="H343A384AA35545B6009E5058FF293729"><enum>(e)</enum><header>Alternative
Means of Compliance</header><text>The applicable authority may permit an
association health plan described in subsection (a)(2) to substitute, for all
or part of the requirements of this section (except subsection (a)(2)(B)(iii)),
such security, guarantee, hold-harmless arrangement, or other financial
arrangement as the applicable authority determines to be adequate to enable the
plan to fully meet all its financial obligations on a timely basis and is
otherwise no less protective of the interests of participants and beneficiaries
than the requirements for which it is substituted. The applicable authority may
take into account, for purposes of this subsection, evidence provided by the
plan or sponsor which demonstrates an assumption of liability with respect to
the plan. Such evidence may be in the form of a contract of indemnification,
lien, bonding, insurance, letter of credit, recourse under applicable terms of
the plan in the form of assessments of participating employers, security, or
other financial arrangement.</text>
</subsection><subsection id="H766CF8C16F6148AFBBD99B6D73E4D02D"><enum>(f)</enum><header>Measures to
Ensure Continued Payment of Benefits by Certain Plans in Distress</header>
<paragraph id="HD076AF8D1E12491CB400A9381CAD3001"><enum>(1)</enum><header>Payments by
certain plans to association health plan fund</header>
<subparagraph id="H205346DC14F8425185EC4D7D5CE9583C"><enum>(A)</enum><header>In
general</header><text>In the case of an association health plan described in
subsection (a)(2), the requirements of this subsection are met if the plan
makes payments into the Association Health Plan Fund under this subparagraph
when they are due. Such payments shall consist of annual payments in the amount
of $5,000, and, in addition to such annual payments, such supplemental payments
as the Secretary may determine to be necessary under paragraph (2). Payments
under this paragraph are payable to the Fund at the time determined by the
Secretary. Initial payments are due in advance of certification under this
part. Payments shall continue to accrue until a plan’s assets are distributed
pursuant to a termination procedure.</text>
</subparagraph><subparagraph id="HAAC7E0AFC53E4355853D2D677F84C69B"><enum>(B)</enum><header>Penalties for
failure to make payments</header><text>If any payment is not made by a plan
when it is due, a late payment charge of not more than 100 percent of the
payment which was not timely paid shall be payable by the plan to the
Fund.</text>
</subparagraph><subparagraph id="H8B5E13D4D1D84773AFFDC338B4C8CFB5"><enum>(C)</enum><header>Continued duty
of the secretary</header><text>The Secretary shall not cease to carry out the
provisions of paragraph (2) on account of the failure of a plan to pay any
payment when due.</text>
</subparagraph></paragraph><paragraph id="H7CD4945450114C0F8D728214D9ED0513"><enum>(2)</enum><header>Payments by
secretary to continue excess/stop loss insurance coverage and indemnification
insurance coverage for certain plans</header><text>In any case in which the
applicable authority determines that there is, or that there is reason to
believe that there will be: (A) a failure to take necessary corrective actions
under section 809(a) with respect to an association health plan described in
subsection (a)(2); or (B) a termination of such a plan under section 809(b) or
810(b)(8) (and, if the applicable authority is not the Secretary, certifies
such determination to the Secretary), the Secretary shall determine the amounts
necessary to make payments to an insurer (designated by the Secretary) to
maintain in force excess/stop loss insurance coverage or indemnification
insurance coverage for such plan, if the Secretary determines that there is a
reasonable expectation that, without such payments, claims would not be
satisfied by reason of termination of such coverage. The Secretary shall, to
the extent provided in advance in appropriation Acts, pay such amounts so
determined to the insurer designated by the Secretary.</text>
</paragraph><paragraph id="HA9A04A446C734B80B6A83C410758BB48"><enum>(3)</enum><header>Association
health plan fund</header>
<subparagraph id="H50C3D69E92B4411397279201C7AEC358"><enum>(A)</enum><header>In
general</header><text>There is established on the books of the Treasury a fund
to be known as the <quote>Association Health Plan Fund</quote>. The Fund shall
be available for making payments pursuant to paragraph (2). The Fund shall be
credited with payments received pursuant to paragraph (1)(A), penalties
received pursuant to paragraph (1)(B); and earnings on investments of amounts
of the Fund under subparagraph (B).</text>
</subparagraph><subparagraph id="H8DC8573C827A40FC98D5477B164E7DAB"><enum>(B)</enum><header>Investment</header><text>Whenever
the Secretary determines that the moneys of the fund are in excess of current
needs, the Secretary may request the investment of such amounts as the
Secretary determines advisable by the Secretary of the Treasury in obligations
issued or guaranteed by the United States.</text>
</subparagraph></paragraph></subsection><subsection id="H7B9D42F467E14C758BF954BA953DA14"><enum>(g)</enum><header>Excess/Stop Loss
Insurance</header><text>For purposes of this section—</text>
<paragraph id="H55CB641F71FF4E05B238F213D5298D50"><enum>(1)</enum><header>Aggregate
excess/stop loss insurance</header><text>The term <term>aggregate excess/stop
loss insurance</term> means, in connection with an association health plan, a
contract—</text>
<subparagraph id="H801A2B9789E84C8600BC95AB78962D33"><enum>(A)</enum><text>under which an
insurer (meeting such minimum standards as the applicable authority may
prescribe by regulation) provides for payment to the plan with respect to
aggregate claims under the plan in excess of an amount or amounts specified in
such contract;</text>
</subparagraph><subparagraph id="H4250F9436EE446A3B49C7200076B001E"><enum>(B)</enum><text>which is
guaranteed renewable; and</text>
</subparagraph><subparagraph id="HBF67380AAFFE41DD9325B8EF047BDCFA"><enum>(C)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</subparagraph></paragraph><paragraph id="H01CB0E321FFD4CA78505E5196EB5CB20"><enum>(2)</enum><header>Specific
excess/stop loss insurance</header><text>The term <term>specific excess/stop
loss insurance</term> means, in connection with an association health plan, a
contract—</text>
<subparagraph id="HE32A491585B14EDB8CD1234EE23ED15C"><enum>(A)</enum><text>under which an
insurer (meeting such minimum standards as the applicable authority may
prescribe by regulation) provides for payment to the plan with respect to
claims under the plan in connection with a covered individual in excess of an
amount or amounts specified in such contract in connection with such covered
individual;</text>
</subparagraph><subparagraph id="H597C64B6FF40466AB96F5B3E46CB98FD"><enum>(B)</enum><text>which is
guaranteed renewable; and</text>
</subparagraph><subparagraph id="H57CF8F4C6D214DEB9F2B23FC63B900F9"><enum>(C)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</subparagraph></paragraph></subsection><subsection id="H53AC70B1EC3E4EAD83EF70AB5916C986"><enum>(h)</enum><header>Indemnification
Insurance</header><text>For purposes of this section, the term
<term>indemnification insurance</term> means, in connection with an association
health plan, a contract—</text>
<paragraph id="H1702CBE23BC74264A92D2DD9DBB0DE47"><enum>(1)</enum><text>under which an
insurer (meeting such minimum standards as the applicable authority may
prescribe by regulation) provides for payment to the plan with respect to
claims under the plan which the plan is unable to satisfy by reason of a
termination pursuant to section 809(b) (relating to mandatory
termination);</text>
</paragraph><paragraph id="H11F584CD5BD8475B9751E08CF9FB1200"><enum>(2)</enum><text>which is
guaranteed renewable and noncancellable for any reason (except as the
applicable authority may prescribe by regulation); and</text>
</paragraph><paragraph id="HF592E5C421094DAA004D025B8596336F"><enum>(3)</enum><text>which allows for
payment of premiums by any third party on behalf of the insured plan.</text>
</paragraph></subsection><subsection id="H35BF261FDC3747DB892778D347400A9"><enum>(i)</enum><header>Reserves</header><text>For
purposes of this section, the term <term>reserves</term> means, in connection
with an association health plan, plan assets which meet the fiduciary standards
under part 4 and such additional requirements regarding liquidity as the
applicable authority may prescribe by regulation.</text>
</subsection><subsection id="H2019875CDEF44B1B8DAFF9E0FE685EE3"><enum>(j)</enum><header>Solvency
Standards Working Group</header>
<paragraph id="H91C941F2B2C64D26A2618E1D8943CB23"><enum>(1)</enum><header>In
general</header><text>Within 90 days after the date of the enactment of the
<short-title>Small Business Growth Act of
2007</short-title>, the applicable authority shall establish a Solvency
Standards Working Group. In prescribing the initial regulations under this
section, the applicable authority shall take into account the recommendations
of such Working Group.</text>
</paragraph><paragraph id="H1B17A667368B4BB585B332E3DDE3C381"><enum>(2)</enum><header>Membership</header><text>The
Working Group shall consist of not more than 15 members appointed by the
applicable authority. The applicable authority shall include among persons
invited to membership on the Working Group at least one of each of the
following:</text>
<subparagraph id="HDE36035897DD4B92B43D26DC9EA8BAC"><enum>(A)</enum><text>a representative of
the National Association of Insurance Commissioners;</text>
</subparagraph><subparagraph id="HB7E5B6EDECAE458C93D726398734DF91"><enum>(B)</enum><text>a representative
of the American Academy of Actuaries;</text>
</subparagraph><subparagraph id="H4A6BBB802C93466881A828FC8EC4ADE2"><enum>(C)</enum><text>a representative
of the State governments, or their interests;</text>
</subparagraph><subparagraph id="H9A37C7181E674904A3CCFBE56123FADB"><enum>(D)</enum><text>a representative
of existing self-insured arrangements, or their interests;</text>
</subparagraph><subparagraph id="H5E9C63C41A38446DA5B0478E3E06C6E"><enum>(E)</enum><text>a representative of
associations of the type referred to in section 801(b)(1), or their interests;
and</text>
</subparagraph><subparagraph id="HA75987B5400F404B967B54144087B56E"><enum>(F)</enum><text>a representative
of multiemployer plans that are group health plans, or their interests.</text>
</subparagraph></paragraph></subsection></section><section id="H7766A993D6364065B9051BDD46DD4838"><enum>807.</enum><header>Requirements
for application and related requirements</header>
<subsection id="H6A525C81C4E749DFB900F2D4E5180965"><enum>(a)</enum><header>Filing
Fee</header><text>Under the procedure prescribed pursuant to section 802(a), an
association health plan shall pay to the applicable authority at the time of
filing an application for certification under this part a filing fee in the
amount of $5,000, which shall be available in the case of the Secretary, to the
extent provided in appropriation Acts, for the sole purpose of administering
the certification procedures applicable with respect to association health
plans.</text>
</subsection><subsection id="HF75AC8F0DECF49E583A0F5B572439E2F"><enum>(b)</enum><header>Information To
Be Included in Application for Certification</header><text>An application for
certification under this part meets the requirements of this section only if it
includes, in a manner and form which shall be prescribed by the applicable
authority by regulation, at least the following information:</text>
<paragraph id="HEB77F65C14DE4C2392F0175A2844257"><enum>(1)</enum><header>Identifying
information</header><text>The names and addresses of—</text>
<subparagraph id="HA7C3053DFDEB4D8F8EBF2EC94CCAFD7"><enum>(A)</enum><text>the sponsor;
and</text>
</subparagraph><subparagraph id="H0669E32F89344B409BF33300F9EFB691"><enum>(B)</enum><text>the members of the
board of trustees of the plan.</text>
</subparagraph></paragraph><paragraph id="H9A65922B883B40ECA227C05772C2C970"><enum>(2)</enum><header>States in which
plan intends to do business</header><text>The States in which participants and
beneficiaries under the plan are to be located and the number of them expected
to be located in each such State.</text>
</paragraph><paragraph id="H210B979D0DBB4B08895D13F24657B049"><enum>(3)</enum><header>Bonding
requirements</header><text>Evidence provided by the board of trustees that the
bonding requirements of section 412 will be met as of the date of the
application or (if later) commencement of operations.</text>
</paragraph><paragraph id="HD916A63125F74EF5A68FB6B2BEE81D2E"><enum>(4)</enum><header>Plan
documents</header><text>A copy of the documents governing the plan (including
any bylaws and trust agreements), the summary plan description, and other
material describing the benefits that will be provided to participants and
beneficiaries under the plan.</text>
</paragraph><paragraph id="HCF226F8D790C47ADA808E2D79F712DE7"><enum>(5)</enum><header>Agreements with
service providers</header><text>A copy of any agreements between the plan and
contract administrators and other service providers.</text>
</paragraph><paragraph id="HC16FFBE311B24B319786FDA1158361B0"><enum>(6)</enum><header>Funding
report</header><text>In the case of association health plans providing benefits
options in addition to health insurance coverage, a report setting forth
information with respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the application,
including the following:</text>
<subparagraph id="HDE2CB019C5D8477EB27735FB1079B777"><enum>(A)</enum><header>Reserves</header><text>A
statement, certified by the board of trustees of the plan, and a statement of
actuarial opinion, signed by a qualified actuary, that all applicable
requirements of section 806 are or will be met in accordance with regulations
which the applicable authority shall prescribe.</text>
</subparagraph><subparagraph id="HF8ED24389EC644859676503E50D5C519"><enum>(B)</enum><header>Adequacy of
contribution rates</header><text>A statement of actuarial opinion, signed by a
qualified actuary, which sets forth a description of the extent to which
contribution rates are adequate to provide for the payment of all obligations
and the maintenance of required reserves under the plan for the 12-month period
beginning with such date within such 120-day period, taking into account the
expected coverage and experience of the plan. If the contribution rates are not
fully adequate, the statement of actuarial opinion shall indicate the extent to
which the rates are inadequate and the changes needed to ensure
adequacy.</text>
</subparagraph><subparagraph id="H4F60EB0A3288476A90FD7F4BED44E3B4"><enum>(C)</enum><header>Current and
projected value of assets and liabilities</header><text>A statement of
actuarial opinion signed by a qualified actuary, which sets forth the current
value of the assets and liabilities accumulated under the plan and a projection
of the assets, liabilities, income, and expenses of the plan for the 12-month
period referred to in subparagraph (B). The income statement shall identify
separately the plan’s administrative expenses and claims.</text>
</subparagraph><subparagraph id="H947DCB3E0C274CDDA068029FEC418B00"><enum>(D)</enum><header>Costs of
coverage to be charged and other expenses</header><text>A statement of the
costs of coverage to be charged, including an itemization of amounts for
administration, reserves, and other expenses associated with the operation of
the plan.</text>
</subparagraph><subparagraph id="H71EFE1D5F53542C4BFC1DF2FD2487771"><enum>(E)</enum><header>Other
information</header><text>Any other information as may be determined by the
applicable authority, by regulation, as necessary to carry out the purposes of
this part.</text>
</subparagraph></paragraph></subsection><subsection id="HB272A5AB45CD4676943814C786FEDB6D"><enum>(c)</enum><header>Filing Notice of
Certification With States</header><text>A certification granted under this part
to an association health plan shall not be effective unless written notice of
such certification is filed with the applicable State authority of each State
in which at least 25 percent of the participants and beneficiaries under the
plan are located. For purposes of this subsection, an individual shall be
considered to be located in the State in which a known address of such
individual is located or in which such individual is employed.</text>
</subsection><subsection id="H61EF1944CE23424A86246B3848161588"><enum>(d)</enum><header>Notice of
Material Changes</header><text>In the case of any association health plan
certified under this part, descriptions of material changes in any information
which was required to be submitted with the application for the certification
under this part shall be filed in such form and manner as shall be prescribed
by the applicable authority by regulation. The applicable authority may require
by regulation prior notice of material changes with respect to specified
matters which might serve as the basis for suspension or revocation of the
certification.</text>
</subsection><subsection id="H2B0133A30E134C4E9970FBC40BE3509"><enum>(e)</enum><header>Reporting
Requirements for Certain Association Health Plans</header><text>An association
health plan certified under this part which provides benefit options in
addition to health insurance coverage for such plan year shall meet the
requirements of section 103 by filing an annual report under such section which
shall include information described in subsection (b)(6) with respect to the
plan year and, notwithstanding section 104(a)(1)(A), shall be filed with the
applicable authority not later than 90 days after the close of the plan year
(or on such later date as may be prescribed by the applicable authority). The
applicable authority may require by regulation such interim reports as it
considers appropriate.</text>
</subsection><subsection id="H8666D9A4E2AF43C3A08205CEE0EB3600"><enum>(f)</enum><header>Engagement of
Qualified Actuary</header><text>The board of trustees of each association
health plan which provides benefits options in addition to health insurance
coverage and which is applying for certification under this part or is
certified under this part shall engage, on behalf of all participants and
beneficiaries, a qualified actuary who shall be responsible for the preparation
of the materials comprising information necessary to be submitted by a
qualified actuary under this part. The qualified actuary shall utilize such
assumptions and techniques as are necessary to enable such actuary to form an
opinion as to whether the contents of the matters reported under this
part—</text>
<paragraph id="H2834E374DF33445D9374C2F6A2BACBA3"><enum>(1)</enum><text>are in the
aggregate reasonably related to the experience of the plan and to reasonable
expectations; and</text>
</paragraph><paragraph id="HC682BC30A65E4B10AECB134975BC216B"><enum>(2)</enum><text>represent such
actuary’s best estimate of anticipated experience under the plan.</text>
</paragraph><continuation-text continuation-text-level="subsection">The
opinion by the qualified actuary shall be made with respect to, and shall be
made a part of, the annual report.</continuation-text></subsection></section><section id="H1900D9594948444C9236EBCF008D28E"><enum>808.</enum><header>Notice
requirements for voluntary termination</header><text display-inline="no-display-inline">Except as provided in section 809(b), an
association health plan which is or has been certified under this part may
terminate (upon or at any time after cessation of accruals in benefit
liabilities) only if the board of trustees, not less than 60 days before the
proposed termination date—</text>
<paragraph id="H3BCBF7B7EB5546859213068CBAC5D35E"><enum>(1)</enum><text>provides to the
participants and beneficiaries a written notice of intent to terminate stating
that such termination is intended and the proposed termination date;</text>
</paragraph><paragraph id="H1A6DC2AC30944F37AA215691CBCC2069"><enum>(2)</enum><text>develops a plan
for winding up the affairs of the plan in connection with such termination in a
manner which will result in timely payment of all benefits for which the plan
is obligated; and</text>
</paragraph><paragraph id="H3C30CE814C92429391ADF122B6D75B31"><enum>(3)</enum><text>submits such plan
in writing to the applicable authority.</text>
</paragraph><continuation-text continuation-text-level="section">Actions
required under this section shall be taken in such form and manner as may be
prescribed by the applicable authority by regulation.</continuation-text></section><section id="H5803B44C9C9B4C1CADFEFCFEE8DFFCB"><enum>809.</enum><header>Corrective
actions and mandatory termination</header>
<subsection id="H81DD0B35DC76484D973500DF1BC3E55E"><enum>(a)</enum><header>Actions to Avoid
Depletion of Reserves</header><text>An association health plan which is
certified under this part and which provides benefits other than health
insurance coverage shall continue to meet the requirements of section 806,
irrespective of whether such certification continues in effect. The board of
trustees of such plan shall determine quarterly whether the requirements of
section 806 are met. In any case in which the board determines that there is
reason to believe that there is or will be a failure to meet such requirements,
or the applicable authority makes such a determination and so notifies the
board, the board shall immediately notify the qualified actuary engaged by the
plan, and such actuary shall, not later than the end of the next following
month, make such recommendations to the board for corrective action as the
actuary determines necessary to ensure compliance with section 806. Not later
than 30 days after receiving from the actuary recommendations for corrective
actions, the board shall notify the applicable authority (in such form and
manner as the applicable authority may prescribe by regulation) of such
recommendations of the actuary for corrective action, together with a
description of the actions (if any) that the board has taken or plans to take
in response to such recommendations. The board shall thereafter report to the
applicable authority, in such form and frequency as the applicable authority
may specify to the board, regarding corrective action taken by the board until
the requirements of section 806 are met.</text>
</subsection><subsection id="H5191EFF79BF64D8095283557BB00687B"><enum>(b)</enum><header>Mandatory
Termination</header><text>In any case in which—</text>
<paragraph id="H38E55B0EC45F426284075FA9867808E1"><enum>(1)</enum><text>the applicable
authority has been notified under subsection (a) (or by an issuer of
excess/stop loss insurance or indemnity insurance pursuant to section 806(a))
of a failure of an association health plan which is or has been certified under
this part and is described in section 806(a)(2) to meet the requirements of
section 806 and has not been notified by the board of trustees of the plan that
corrective action has restored compliance with such requirements; and</text>
</paragraph><paragraph id="H64EFA07F7346438E00FB22A967A99FB2"><enum>(2)</enum><text>the applicable
authority determines that there is a reasonable expectation that the plan will
continue to fail to meet the requirements of section 806,</text>
</paragraph><continuation-text continuation-text-level="subsection">the board
of trustees of the plan shall, at the direction of the applicable authority,
terminate the plan and, in the course of the termination, take such actions as
the applicable authority may require, including satisfying any claims referred
to in section 806(a)(2)(B)(iii) and recovering for the plan any liability under
subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure that
the affairs of the plan will be, to the maximum extent possible, wound up in a
manner which will result in timely provision of all benefits for which the plan
is obligated.</continuation-text></subsection></section><section id="H327F8166301E41BDADCAF37333540636"><enum>810.</enum><header>Trusteeship by
the Secretary of insolvent association health plans providing health benefits
in addition to health insurance coverage</header>
<subsection id="H218B0231F35848BBBE43C0A8EF2DB6D8"><enum>(a)</enum><header>Appointment of
Secretary as Trustee for Insolvent Plans</header><text>Whenever the Secretary
determines that an association health plan which is or has been certified under
this part and which is described in section 806(a)(2) will be unable to provide
benefits when due or is otherwise in a financially hazardous condition, as
shall be defined by the Secretary by regulation, the Secretary shall, upon
notice to the plan, apply to the appropriate United States district court for
appointment of the Secretary as trustee to administer the plan for the duration
of the insolvency. The plan may appear as a party and other interested persons
may intervene in the proceedings at the discretion of the court. The court
shall appoint such Secretary trustee if the court determines that the
trusteeship is necessary to protect the interests of the participants and
beneficiaries or providers of medical care or to avoid any unreasonable
deterioration of the financial condition of the plan. The trusteeship of such
Secretary shall continue until the conditions described in the first sentence
of this subsection are remedied or the plan is terminated.</text>
</subsection><subsection id="H2CB1E7A571134093A876991143607107"><enum>(b)</enum><header>Powers as
Trustee</header><text>The Secretary, upon appointment as trustee under
subsection (a), shall have the power—</text>
<paragraph id="H2BF5CB8C1FD94C55AF50705DEF8721AD"><enum>(1)</enum><text>to do any act
authorized by the plan, this title, or other applicable provisions of law to be
done by the plan administrator or any trustee of the plan;</text>
</paragraph><paragraph id="H3A7F45AB2FF3404F00783FCC805FD3C2"><enum>(2)</enum><text>to require the
transfer of all (or any part) of the assets and records of the plan to the
Secretary as trustee;</text>
</paragraph><paragraph id="H10E51FA08D984595AECDF0E27837FD44"><enum>(3)</enum><text>to invest any
assets of the plan which the Secretary holds in accordance with the provisions
of the plan, regulations prescribed by the Secretary, and applicable provisions
of law;</text>
</paragraph><paragraph id="HB8003F7B5F614A24A1002C1472EBF16C"><enum>(4)</enum><text>to require the
sponsor, the plan administrator, any participating employer, and any employee
organization representing plan participants to furnish any information with
respect to the plan which the Secretary as trustee may reasonably need in order
to administer the plan;</text>
</paragraph><paragraph id="HCD56A278AC6342778192C6CC5EE08502"><enum>(5)</enum><text>to collect for the
plan any amounts due the plan and to recover reasonable expenses of the
trusteeship;</text>
</paragraph><paragraph id="H9AAD4EFC0402438800EE2ED81200F839"><enum>(6)</enum><text>to commence,
prosecute, or defend on behalf of the plan any suit or proceeding involving the
plan;</text>
</paragraph><paragraph id="H559A147D94F74D43863219C5D3C74392"><enum>(7)</enum><text>to issue, publish,
or file such notices, statements, and reports as may be required by the
Secretary by regulation or required by any order of the court;</text>
</paragraph><paragraph id="HC56DC4043EA54FD48F080078A95C0627"><enum>(8)</enum><text>to terminate the
plan (or provide for its termination in accordance with section 809(b)) and
liquidate the plan assets, to restore the plan to the responsibility of the
sponsor, or to continue the trusteeship;</text>
</paragraph><paragraph id="H8B9C2A065AFA4232AA61F2A595F9FFB"><enum>(9)</enum><text>to provide for the
enrollment of plan participants and beneficiaries under appropriate coverage
options; and</text>
</paragraph><paragraph id="H4638800849E7412A93BB70211C5B2CDD"><enum>(10)</enum><text>to do such other
acts as may be necessary to comply with this title or any order of the court
and to protect the interests of plan participants and beneficiaries and
providers of medical care.</text>
</paragraph></subsection><subsection id="HBAEB1B53E6F04D4FAF94AB99EC457F00"><enum>(c)</enum><header>Notice of
Appointment</header><text>As soon as practicable after the Secretary’s
appointment as trustee, the Secretary shall give notice of such appointment
to—</text>
<paragraph id="HBD1155D390BA4EB4BBE6F34A72E0097"><enum>(1)</enum><text>the sponsor and
plan administrator;</text>
</paragraph><paragraph id="H70D380258E7D4ABDAB1904B9C388FA9E"><enum>(2)</enum><text>each
participant;</text>
</paragraph><paragraph id="HEA929BEDF0194B79A609515DC65F8100"><enum>(3)</enum><text>each participating
employer; and</text>
</paragraph><paragraph id="HEA7957D7D53A4347922C000045F2E4E6"><enum>(4)</enum><text>if applicable,
each employee organization which, for purposes of collective bargaining,
represents plan participants.</text>
</paragraph></subsection><subsection id="H5F264078476D4FE7903549E1808B3CDF"><enum>(d)</enum><header>Additional
Duties</header><text>Except to the extent inconsistent with the provisions of
this title, or as may be otherwise ordered by the court, the Secretary, upon
appointment as trustee under this section, shall be subject to the same duties
as those of a trustee under <external-xref legal-doc="usc" parsable-cite="usc/11/704">section 704</external-xref> of title 11, United States Code, and
shall have the duties of a fiduciary for purposes of this title.</text>
</subsection><subsection id="HD683A8DFF3DD40459081EBF3D700641D"><enum>(e)</enum><header>Other
Proceedings</header><text>An application by the Secretary under this subsection
may be filed notwithstanding the pendency in the same or any other court of any
bankruptcy, mortgage foreclosure, or equity receivership proceeding, or any
proceeding to reorganize, conserve, or liquidate such plan or its property, or
any proceeding to enforce a lien against property of the plan.</text>
</subsection><subsection id="H8C9EA2FA75144722BE0228B80085778C"><enum>(f)</enum><header>Jurisdiction of
Court</header>
<paragraph id="HEC2529799CAD46388EA0FE03EBB6D1C"><enum>(1)</enum><header>In
general</header><text>Upon the filing of an application for the appointment as
trustee or the issuance of a decree under this section, the court to which the
application is made shall have exclusive jurisdiction of the plan involved and
its property wherever located with the powers, to the extent consistent with
the purposes of this section, of a court of the United States having
jurisdiction over cases under <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/11/11">chapter 11</external-xref> of title 11, United States Code.
Pending an adjudication under this section such court shall stay, and upon
appointment by it of the Secretary as trustee, such court shall continue the
stay of, any pending mortgage foreclosure, equity receivership, or other
proceeding to reorganize, conserve, or liquidate the plan, the sponsor, or
property of such plan or sponsor, and any other suit against any receiver,
conservator, or trustee of the plan, the sponsor, or property of the plan or
sponsor. Pending such adjudication and upon the appointment by it of the
Secretary as trustee, the court may stay any proceeding to enforce a lien
against property of the plan or the sponsor or any other suit against the plan
or the sponsor.</text>
</paragraph><paragraph id="HD978C02BBD524F00924F2BB0A8D61E80"><enum>(2)</enum><header>Venue</header><text>An
action under this section may be brought in the judicial district where the
sponsor or the plan administrator resides or does business or where any asset
of the plan is situated. A district court in which such action is brought may
issue process with respect to such action in any other judicial
district.</text>
</paragraph></subsection><subsection id="H14E0F6B2BFF449828D00F3998E4E745"><enum>(g)</enum><header>Personnel</header><text>In
accordance with regulations which shall be prescribed by the Secretary, the
Secretary shall appoint, retain, and compensate accountants, actuaries, and
other professional service personnel as may be necessary in connection with the
Secretary’s service as trustee under this section.</text>
</subsection></section><section id="H59F00F1206DA4182A89DC5787EB5CBD"><enum>811.</enum><header>State assessment
authority</header>
<subsection id="HE1B5C07FD86E4A7CA72B85D76119AB71"><enum>(a)</enum><header>In
General</header><text>Notwithstanding section 514, a State may impose by law a
contribution tax on an association health plan described in section 806(a)(2),
if the plan commenced operations in such State after the date of the enactment
of the <short-title>Small Business Growth Act of
2007</short-title>.</text>
</subsection><subsection id="H8F27F28F1A4A476500BC8B2EEB049E35"><enum>(b)</enum><header>Contribution
Tax</header><text>For purposes of this section, the term <term>contribution
tax</term> imposed by a State on an association health plan means any tax
imposed by such State if—</text>
<paragraph id="H6961B26527C841AFB312EEA32756AAC7"><enum>(1)</enum><text>such tax is
computed by applying a rate to the amount of premiums or contributions, with
respect to individuals covered under the plan who are residents of such State,
which are received by the plan from participating employers located in such
State or from such individuals;</text>
</paragraph><paragraph id="HE70E4E4FD64F4FB599C517E61DE764C1"><enum>(2)</enum><text>the rate of such
tax does not exceed the rate of any tax imposed by such State on premiums or
contributions received by insurers or health maintenance organizations for
health insurance coverage offered in such State in connection with a group
health plan;</text>
</paragraph><paragraph id="HFE6338B9E3FB4EB283A2A2D3FB790043"><enum>(3)</enum><text>such tax is
otherwise nondiscriminatory; and</text>
</paragraph><paragraph id="H5F461769EB5F43DEB41CDE734471434D"><enum>(4)</enum><text>the amount of any
such tax assessed on the plan is reduced by the amount of any tax or assessment
otherwise imposed by the State on premiums, contributions, or both received by
insurers or health maintenance organizations for health insurance coverage,
aggregate excess/stop loss insurance (as defined in section 806(g)(1)),
specific excess/stop loss insurance (as defined in section 806(g)(2)), other
insurance related to the provision of medical care under the plan, or any
combination thereof provided by such insurers or health maintenance
organizations in such State in connection with such plan.</text>
</paragraph></subsection></section><section id="H503A2061E9034EB797C1FC889DCC9278"><enum>812.</enum><header>Definitions and
rules of construction</header>
<subsection id="HF0F64CFB64D84731AB8401B75580B8A0"><enum>(a)</enum><header>Definitions</header><text>For
purposes of this part—</text>
<paragraph id="H99CBDFF0BAB3444093E43306FF751FB6"><enum>(1)</enum><header>Group health
plan</header><text>The term <term>group health plan</term> has the meaning
provided in section 733(a)(1) (after applying subsection (b) of this
section).</text>
</paragraph><paragraph id="HE994AE6736E349F4960072FD87838527"><enum>(2)</enum><header>Medical
care</header><text>The term <term>medical care</term> has the meaning provided
in section 733(a)(2).</text>
</paragraph><paragraph id="H9E5E18A6BFE54B2AB712AA17EC68C800"><enum>(3)</enum><header>Health insurance
coverage</header><text>The term <term>health insurance coverage</term> has the
meaning provided in section 733(b)(1).</text>
</paragraph><paragraph id="HD7A3809855624E47AFB3FE2368FD70EC"><enum>(4)</enum><header>Health insurance
issuer</header><text>The term <term>health insurance issuer</term> has the
meaning provided in section 733(b)(2).</text>
</paragraph><paragraph id="H5BCC7CF44C4E43D0ACBD0721C4161500"><enum>(5)</enum><header>Applicable
authority</header><text>The term <term>applicable authority</term> means the
Secretary, except that, in connection with any exercise of the Secretary’s
authority regarding which the Secretary is required under section 506(d) to
consult with a State, such term means the Secretary, in consultation with such
State.</text>
</paragraph><paragraph id="H5D42285AC1FB41DA90004BEBEF322B69"><enum>(6)</enum><header>Health
status-related factor</header><text>The term <term>health status-related
factor</term> has the meaning provided in section 733(d)(2).</text>
</paragraph><paragraph id="H020436665B1B4BCCB8A5F0C0C500C7F2"><enum>(7)</enum><header>Individual
market</header>
<subparagraph id="H4F5D7C6807AF4BC893BEDB18098E7728"><enum>(A)</enum><header>In
general</header><text>The term <term>individual market</term> means the market
for health insurance coverage offered to individuals other than in connection
with a group health plan.</text>
</subparagraph><subparagraph id="HC7B8F4478C454323B3E5EE398200257D"><enum>(B)</enum><header>Treatment of
very small groups</header>
<clause id="H99EB5F41577441728001805DA1B4B127"><enum>(i)</enum><header>In
general</header><text>Subject to clause (ii), such term includes coverage
offered in connection with a group health plan that has fewer than 2
participants as current employees or participants described in section
732(d)(3) on the first day of the plan year.</text>
</clause><clause id="HC46FBB4D907C430CB5AD6DFFF3FB01DC"><enum>(ii)</enum><header>State
exception</header><text>Clause (i) shall not apply in the case of health
insurance coverage offered in a State if such State regulates the coverage
described in such clause in the same manner and to the same extent as coverage
in the small group market (as defined in section 2791(e)(5) of the
<act-name parsable-cite="PHSA">Public Health Service Act</act-name>) is
regulated by such State.</text>
</clause></subparagraph></paragraph><paragraph id="HCA45DE710F46462B8CDF6BABAE778CE"><enum>(8)</enum><header>Participating
employer</header><text>The term <term>participating employer</term> means, in
connection with an association health plan, any employer, if any individual who
is an employee of such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined under the terms
of the plan, of such individual) is or was covered under such plan in
connection with the status of such individual as such an employee, partner, or
self-employed individual in relation to the plan.</text>
</paragraph><paragraph id="H00B3D46182D745738662FCFDC8BEAE7F"><enum>(9)</enum><header>Applicable state
authority</header><text>The term <term>applicable State authority</term> means,
with respect to a health insurance issuer in a State, the State insurance
commissioner or official or officials designated by the State to enforce the
requirements of title XXVII of the <act-name parsable-cite="PHSA">Public Health
Service Act</act-name> for the State involved with respect to such
issuer.</text>
</paragraph><paragraph id="HA398D9FC00D04AD6885F38008909C474"><enum>(10)</enum><header>Qualified
actuary</header><text>The term <term>qualified actuary</term> means an
individual who is a member of the American Academy of Actuaries.</text>
</paragraph><paragraph id="H5D73454C85BA45EFB3D780B74200BD62"><enum>(11)</enum><header>Affiliated
member</header><text>The term <term>affiliated member</term> means, in
connection with a sponsor—</text>
<subparagraph id="H301867412829447CA6F0E200D1CE26A4"><enum>(A)</enum><text>a person who is
otherwise eligible to be a member of the sponsor but who elects an affiliated
status with the sponsor,</text>
</subparagraph><subparagraph id="H7CDF94BB78774FCC98A8609BD86DA8E7"><enum>(B)</enum><text>in the case of a
sponsor with members which consist of associations, a person who is a member of
any such association and elects an affiliated status with the sponsor,
or</text>
</subparagraph><subparagraph id="HC981C09AD7D7436CA7DE107787E19B23"><enum>(C)</enum><text>in the case of an
association health plan in existence on the date of the enactment of the
<short-title>Small Business Growth Act of
2007</short-title>, a person eligible to be a member of the sponsor or one of
its member associations.</text>
</subparagraph></paragraph><paragraph id="H9F6855AB9FE04FC7A2C09008B3F7F539"><enum>(12)</enum><header>Large
employer</header><text>The term <term>large employer</term> means, in
connection with a group health plan with respect to a plan year, an employer
who employed an average of at least 51 employees on business days during the
preceding calendar year and who employs at least 2 employees on the first day
of the plan year.</text>
</paragraph><paragraph id="H2DE4DCED93C64D4F843B6009733D23AF"><enum>(13)</enum><header>Small
employer</header><text>The term <term>small employer</term> means, in
connection with a group health plan with respect to a plan year, an employer
who is not a large employer.</text>
</paragraph></subsection><subsection id="H6B1B7C187AA6443FAC32B3E0A3B0B98E"><enum>(b)</enum><header>Rules of
Construction</header>
<paragraph id="H0C2DDB1E01BE4E5AA6864C5990367213"><enum>(1)</enum><header>Employers and
employees</header><text>For purposes of determining whether a plan, fund, or
program is an employee welfare benefit plan which is an association health
plan, and for purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare benefit
plan—</text>
<subparagraph id="H68D057459B1E48C9AE5E9D62413E332B"><enum>(A)</enum><text>in the case of a
partnership, the term <term>employer</term> (as defined in section 3(5))
includes the partnership in relation to the partners, and the term
<term>employee</term> (as defined in section 3(6)) includes any partner in
relation to the partnership; and</text>
</subparagraph><subparagraph id="HFABA8D71C04E4595B9AEB6316ECFA1F"><enum>(B)</enum><text>in the case of a
self-employed individual, the term <term>employer</term> (as defined in section
3(5)) and the term <term>employee</term> (as defined in section 3(6)) shall
include such individual.</text>
</subparagraph></paragraph><paragraph id="HFD1E01FDF74A43CAB8212C27E749BDD0"><enum>(2)</enum><header>Plans, funds,
and programs treated as employee welfare benefit plans</header><text>In the
case of any plan, fund, or program which was established or is maintained for
the purpose of providing medical care (through the purchase of insurance or
otherwise) for employees (or their dependents) covered thereunder and which
demonstrates to the Secretary that all requirements for certification under
this part would be met with respect to such plan, fund, or program if such
plan, fund, or program were a group health plan, such plan, fund, or program
shall be treated for purposes of this title as an employee welfare benefit plan
on and after the date of such
demonstration.</text>
</paragraph></subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HD1CB6BDD4C64422896E68288B25D3718"><enum>(b)</enum><header>Conforming
Amendments to Preemption Rules</header>
<paragraph id="HC75E21EFFA694CBAA6FC001485AB66C6"><enum>(1)</enum><text>Section 514(b)(6)
of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1144">29 U.S.C. 1144(b)(6)</external-xref>) is amended by adding at the end the
following new subparagraph:</text>
<quoted-block id="H7F50595CF21E4FE0A3A0EA91842F1FB1" style="OLC">
<subparagraph id="HD1FF1A23A90548758388E7AAB3BCDD1D" indent="up2"><enum>(E)</enum><text>The preceding subparagraphs of this
paragraph do not apply with respect to any State law in the case of an
association health plan which is certified under part
8.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H7BAA9613AEDD4080AC73D705B7ED13D4"><enum>(2)</enum><text>Section 514 of
such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1144">29 U.S.C. 1144</external-xref>) is amended—</text>
<subparagraph id="HDC5BDA2ECD3D46F182226728FF4991CE"><enum>(A)</enum><text>in subsection
(b)(4), by striking <quote>Subsection (a)</quote> and inserting
<quote>Subsections (a) and (d)</quote>;</text>
</subparagraph><subparagraph id="H0D7B16D2181C4EE7874E4600AE03CD9B"><enum>(B)</enum><text>in subsection
(b)(5), by striking <quote>subsection (a)</quote> in subparagraph (A) and
inserting <quote>subsection (a) of this section and subsections (a)(2)(B) and
(b) of section 805</quote>, and by striking <quote>subsection (a)</quote> in
subparagraph (B) and inserting <quote>subsection (a) of this section or
subsection (a)(2)(B) or (b) of section 805</quote>;</text>
</subparagraph><subparagraph id="H8E5C363EBDBC433F8673ABA92B077777"><enum>(C)</enum><text>by redesignating
subsections (d) and (e) as subsections (e) and (f), respectively; and</text>
</subparagraph><subparagraph id="HD21CEEA25A1E4471B1B161C041CA9FB1"><enum>(D)</enum><text>by inserting after
subsection (c) the following new subsection:</text>
<quoted-block id="H4931CAC014B64525901EF7709130B4FA" style="OLC">
<subsection id="H742E7291EB404326A050FD51B87F759"><enum>(d)</enum><paragraph commented="no" display-inline="yes-display-inline" id="H5379BD16099F4F168FBEDEEA3036FBF3"><enum>(1)</enum><text>Except as provided in
subsection (b)(4), the provisions of this title shall supersede any and all
State laws insofar as they may now or hereafter preclude, or have the effect of
precluding, a health insurance issuer from offering health insurance coverage
in connection with an association health plan which is certified under part
8.</text>
</paragraph><paragraph id="H3A00CDDECE94428985ABC98E00C24FD0" indent="up1"><enum>(2)</enum><text>Except as provided in paragraphs (4)
and (5) of subsection (b) of this section—</text>
<subparagraph id="H2ABE8CE507CA4B26B0F7894636509D63"><enum>(A)</enum><text>In any case in which health insurance
coverage of any policy type is offered under an association health plan
certified under part 8 to a participating employer operating in such State, the
provisions of this title shall supersede any and all laws of such State insofar
as they may preclude a health insurance issuer from offering health insurance
coverage of the same policy type to other employers operating in the State
which are eligible for coverage under such association health plan, whether or
not such other employers are participating employers in such plan.</text>
</subparagraph><subparagraph id="H1DF25647287E40E19CABFC794CC9D600"><enum>(B)</enum><text>In any case in which health insurance
coverage of any policy type is offered in a State under an association health
plan certified under part 8 and the filing, with the applicable State authority
(as defined in section 812(a)(9)), of the policy form in connection with such
policy type is approved by such State authority, the provisions of this title
shall supersede any and all laws of any other State in which health insurance
coverage of such type is offered, insofar as they may preclude, upon the filing
in the same form and manner of such policy form with the applicable State
authority in such other State, the approval of the filing in such other
State.</text>
</subparagraph></paragraph><paragraph id="H9A03A6329D7E4DD3A2E63D00E97260FE" indent="up1"><enum>(3)</enum><text>Nothing in subsection (b)(6)(E) or
the preceding provisions of this subsection shall be construed, with respect to
health insurance issuers or health insurance coverage, to supersede or impair
the law of any State—</text>
<subparagraph id="H02DA48A1D73442D5A420CF74FF67B2C9"><enum>(A)</enum><text>providing solvency standards or
similar standards regarding the adequacy of insurer capital, surplus, reserves,
or contributions, or</text>
</subparagraph><subparagraph id="HB2D1CB97340E4577989EC969C2C27231"><enum>(B)</enum><text>relating to prompt payment of
claims.</text>
</subparagraph></paragraph><paragraph id="HEAD4F198980A4EEB8B97E3006150961B" indent="up1"><enum>(4)</enum><text>For additional provisions relating to
association health plans, see subsections (a)(2)(B) and (b) of section
805.</text>
</paragraph><paragraph id="H1B05314120E949B6A793A08047C3D1E8" indent="up1"><enum>(5)</enum><text>For purposes of this subsection, the
term <term>association health plan</term> has the meaning provided in section
801(a), and the terms <term>health insurance coverage</term>,
<term>participating employer</term>, and <term>health insurance issuer</term>
have the meanings provided such terms in section 812,
respectively.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H18947CD5E2E44B59AA76F6DF471BB798"><enum>(3)</enum><text>Section
514(b)(6)(A) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1144">29 U.S.C. 1144(b)(6)(A)</external-xref>) is amended—</text>
<subparagraph id="HDE51E159BBA046488E830011631F0076"><enum>(A)</enum><text>in clause (i)(II),
by striking <quote>and</quote> at the end;</text>
</subparagraph><subparagraph id="H8C4AA63C54454D178BEB43CCF6B1B97"><enum>(B)</enum><text>in clause (ii), by
inserting <quote>and which does not provide medical care (within the meaning of
section 733(a)(2)),</quote> after <quote>arrangement,</quote>, and by striking
<quote>title.</quote> and inserting <quote>title, and</quote>; and</text>
</subparagraph><subparagraph id="HC4833459D48E435EB02602D02E33A557"><enum>(C)</enum><text>by adding at the
end the following new clause:</text>
<quoted-block id="H78D32A4FF0DC4E7C95200000A8DDB51B" style="OLC">
<clause id="HE6E0B455982A41B4B4ED6B32AAB493D9" indent="up2"><enum>(iii)</enum><text>subject to subparagraph (E), in the
case of any other employee welfare benefit plan which is a multiple employer
welfare arrangement and which provides medical care (within the meaning of
section 733(a)(2)), any law of any State which regulates insurance may
apply.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H0312F38DCC484072AFCF60E824B7B320"><enum>(4)</enum><text>Section 514(e) of
such Act (as redesignated by paragraph (2)(C)) is amended—</text>
<subparagraph id="H2CBB993BB18340A688721CE8A36ED49C"><enum>(A)</enum><text>by striking
<quote>Nothing</quote> and inserting <quote>(1) Except as provided in paragraph
(2), nothing</quote>; and</text>
</subparagraph><subparagraph id="HB6283557E67B4472861C04D7ADE4D00"><enum>(B)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block id="HAA77E05DA9584EC7A1838FCF8E54D4A7" style="OLC">
<paragraph id="H1F733E142C634D318BAAEC878D9C1927" indent="up1"><enum>(2)</enum><text>Nothing in any other provision of law
enacted on or after the date of the enactment of the
<short-title>Small Business Growth Act of
2007</short-title> shall be construed to alter, amend, modify, invalidate,
impair, or supersede any provision of this title, except by specific
cross-reference to the affected
section.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="H7E63BEA5EBB64C17AE8C6573871103DD"><enum>(c)</enum><header>Plan
Sponsor</header><text>Section 3(16)(B) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/102">29 U.S.C. 102(16)(B)</external-xref>) is
amended by adding at the end the following new sentence: <quote>Such term also
includes a person serving as the sponsor of an association health plan under
part 8.</quote>.</text>
</subsection><subsection id="H591244A6395B4E17A735CEDA01EDA1CA"><enum>(d)</enum><header>Disclosure of
Solvency Protections Related to Self-Insured and Fully Insured Options Under
Association Health Plans</header><text>Section 102(b) of such Act (29 U.S.C.
102(b)) is amended by adding at the end the following: <quote>An association
health plan shall include in its summary plan description, in connection with
each benefit option, a description of the form of solvency or guarantee fund
protection secured pursuant to this Act or applicable State law, if
any.</quote>.</text>
</subsection><subsection id="H52587095030F429881B48400FCC81D6"><enum>(e)</enum><header>Savings
Clause</header><text>Section 731(c) of such Act is amended by inserting
<quote>or part 8</quote> after <quote>this part</quote>.</text>
</subsection><subsection id="H7631B7992C5C49F8BE0014C53676B929"><enum>(f)</enum><header>Report to the
Congress Regarding Certification of Self-Insured Association Health
Plans</header><text>Not later than January 1, 2012, the Secretary of Labor
shall report to the Committee on Education and Labor of the House of
Representatives and the Committee on Health, Education, Labor, and Pensions of
the Senate the effect association health plans have had, if any, on reducing
the number of uninsured individuals.</text>
</subsection><subsection id="HC8955E6FE1AF4C97B8A59019DA44839E"><enum>(g)</enum><header>Clerical
Amendment</header><text>The table of contents in section 1 of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> is amended by inserting after the item relating to section 734
the following new items:</text>
<quoted-block act-name="Employee" id="HA4073F52BE204088B523B417F911BB00" style="OLC">
<toc regeneration="yes-regeneration">
<toc-entry level="part">Part 8—Rules Governing Association Health
Plans</toc-entry>
<toc-entry level="section">801. Association health plans.</toc-entry>
<toc-entry level="section">802. Certification of association health
plans.</toc-entry>
<toc-entry level="section">803. Requirements relating to sponsors and
boards of trustees.</toc-entry>
<toc-entry level="section">804. Participation and coverage
requirements.</toc-entry>
<toc-entry level="section">805. Other requirements relating to plan
documents, contribution rates, and benefit options.</toc-entry>
<toc-entry level="section">806. Maintenance of reserves and
provisions for solvency for plans providing health benefits in addition to
health insurance coverage.</toc-entry>
<toc-entry level="section">807. Requirements for application and
related requirements.</toc-entry>
<toc-entry level="section">808. Notice requirements for voluntary
termination.</toc-entry>
<toc-entry level="section">809. Corrective actions and mandatory
termination.</toc-entry>
<toc-entry level="section">810. Trusteeship by the Secretary of
insolvent association health plans providing health benefits in addition to
health insurance coverage.</toc-entry>
<toc-entry level="section">811. State assessment
authority.</toc-entry>
<toc-entry level="section">812. Definitions and rules of
construction.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H0D38EFE35B784D2E97B0F56C8331B4EB"><enum>102.</enum><header>Clarification
of treatment of single employer arrangements</header><text display-inline="no-display-inline">Section 3(40)(B) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1002">29 U.S.C. 1002(40)(B)</external-xref>) is amended—</text>
<paragraph id="H805BD613446345118B1117B5031C0910"><enum>(1)</enum><text>in clause (i), by
inserting after <quote>control group,</quote> the following: <quote>except
that, in any case in which the benefit referred to in subparagraph (A) consists
of medical care (as defined in section 812(a)(2)), two or more trades or
businesses, whether or not incorporated, shall be deemed a single employer for
any plan year of such plan, or any fiscal year of such other arrangement, if
such trades or businesses are within the same control group during such year or
at any time during the preceding 1-year period,</quote>;</text>
</paragraph><paragraph id="HBB3AB4D2BA96448281CC48AC3438E645"><enum>(2)</enum><text>in clause (iii),
by striking <quote>(iii) the determination</quote> and inserting the
following:</text>
<quoted-block id="H62491107A10442008E001100573361A0" style="OLC">
<clause id="H99C595E6BD4543E5BCFB7CAC37EA0AD" indent="up2"><enum>(iii)</enum><subclause commented="no" display-inline="yes-display-inline" id="H273E15B4340C449AB29F12399C31B76F"><enum>(I)</enum><text>in any case in which the
benefit referred to in subparagraph (A) consists of medical care (as defined in
section 812(a)(2)), the determination of whether a trade or business is under
<quote>common control</quote> with another trade or business shall be
determined under regulations of the Secretary applying principles consistent
and coextensive with the principles applied in determining whether employees of
two or more trades or businesses are treated as employed by a single employer
under section 4001(b), except that, for purposes of this paragraph, an interest
of greater than 25 percent may not be required as the minimum interest
necessary for common control, or</text>
</subclause><subclause id="HB2221882F4AE4E10A1BA82BC213B2B64" indent="up1"><enum>(II)</enum><text>in any other case, the
determination</text>
</subclause></clause><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph id="H8372FB677D57425F9F80D6F8F68B1073"><enum>(3)</enum><text>by redesignating
clauses (iv) and (v) as clauses (v) and (vi), respectively; and</text>
</paragraph><paragraph id="H50CF216936FF4443BA530020F52D00C4"><enum>(4)</enum><text>by inserting after
clause (iii) the following new clause:</text>
<quoted-block id="HB0FF6FE2CA204423A5D4682788671FC4" style="OLC">
<clause id="HECFB450C8DE1480E8DBCDEE94B009D2F" indent="up2"><enum>(iv)</enum><text>in any case in which the benefit
referred to in subparagraph (A) consists of medical care (as defined in section
812(a)(2)), in determining, after the application of clause (i), whether
benefits are provided to employees of two or more employers, the arrangement
shall be treated as having only one participating employer if, after the
application of clause (i), the number of individuals who are employees and
former employees of any one participating employer and who are covered under
the arrangement is greater than 75 percent of the aggregate number of all
individuals who are employees or former employees of participating employers
and who are covered under the
arrangement,</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><section id="H68282654FBC34AE1A6CA9E7653006300"><enum>103.</enum><header>Enforcement
provisions relating to association health plans</header>
<subsection id="HD6CD448237664089B89155323058E3C1"><enum>(a)</enum><header>Criminal
Penalties for Certain Willful Misrepresentations</header><text>Section 501 of
the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1131">29 U.S.C. 1131</external-xref>) is amended—</text>
<paragraph id="H674C99BA46F443ECBEC7F14909CC0042"><enum>(1)</enum><text>by inserting
<quote>(a)</quote> after <quote>Sec. 501.</quote>; and</text>
</paragraph><paragraph id="HF617D42C8E96476F8CE5B7FB59FAFBC2"><enum>(2)</enum><text>by adding at the
end the following new subsection:</text>
<quoted-block id="H4D2A52A6FB6F4BB096134CE33F58371E" style="OLC">
<subsection id="HBE63FB9BE53F476EBA33D96B4B57A468"><enum>(b)</enum><text>Any person who
willfully falsely represents, to any employee, any employee’s beneficiary, any
employer, the Secretary, or any State, a plan or other arrangement established
or maintained for the purpose of offering or providing any benefit described in
section 3(1) to employees or their beneficiaries as—</text>
<paragraph id="H436BAECE08D74413A0B4A9883148DD00"><enum>(1)</enum><text>being an
association health plan which has been certified under part 8;</text>
</paragraph><paragraph id="H7B0B627557E24B63BAFF48DDAB8500FD"><enum>(2)</enum><text>having been
established or maintained under or pursuant to one or more collective
bargaining agreements which are reached pursuant to collective bargaining
described in section 8(d) of the National Labor Relations Act (29 U.S.C.
158(d)) or paragraph Fourth of section 2 of the Railway Labor Act (45 U.S.C.
152, paragraph Fourth) or which are reached pursuant to labor-management
negotiations under similar provisions of State public employee relations laws;
or</text>
</paragraph><paragraph id="H1D59AE4DB98C4A89A4C7FF5FFDBCAF6"><enum>(3)</enum><text>being a plan or
arrangement described in section 3(40)(A)(i),</text>
</paragraph><continuation-text continuation-text-level="subsection">shall,
upon conviction, be imprisoned not more than 5 years, be fined under title 18,
United States Code, or
both.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HDD2F3E145D9047E6BAE54D4DE621BF23"><enum>(b)</enum><header>Cease Activities
Orders</header><text>Section 502 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132</external-xref>) is amended by
adding at the end the following new subsection:</text>
<quoted-block id="HEB0DF23E45C940A3AC467EE7314941BB" style="OLC">
<subsection id="HB8350F3AC1E34F6FA78D63AA68511C48"><enum>(n)</enum><header>Association
Health Plan Cease and Desist Orders</header>
<paragraph id="H4A2B88FBA04D41CAAD12F413E6A2402F"><enum>(1)</enum><header>In
general</header><text>Subject to paragraph (2), upon application by the
Secretary showing the operation, promotion, or marketing of an association
health plan (or similar arrangement providing benefits consisting of medical
care (as defined in section 733(a)(2))) that—</text>
<subparagraph id="H0A74910359E9468289001BDF30B464F"><enum>(A)</enum><text>is not certified
under part 8, is subject under section 514(b)(6) to the insurance laws of any
State in which the plan or arrangement offers or provides benefits, and is not
licensed, registered, or otherwise approved under the insurance laws of such
State; or</text>
</subparagraph><subparagraph id="H8DC86E20C42E41B6864902C702AFE514"><enum>(B)</enum><text>is an association
health plan certified under part 8 and is not operating in accordance with the
requirements under part 8 for such certification,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">a district
court of the United States shall enter an order requiring that the plan or
arrangement cease activities.</continuation-text></paragraph><paragraph id="H02AFD5BD73464662A4A950422287DD90"><enum>(2)</enum><header>Exception</header><text>Paragraph
(1) shall not apply in the case of an association health plan or other
arrangement if the plan or arrangement shows that—</text>
<subparagraph id="H3589CB5EC044421488BF782ED8FED822"><enum>(A)</enum><text>all benefits under
it referred to in paragraph (1) consist of health insurance coverage;
and</text>
</subparagraph><subparagraph id="HFE6FC6A4F5714BADA8A866ECCCF599E"><enum>(B)</enum><text>with respect to
each State in which the plan or arrangement offers or provides benefits, the
plan or arrangement is operating in accordance with applicable State laws that
are not superseded under section 514.</text>
</subparagraph></paragraph><paragraph id="H382D3920EB8D4448004BBFE3A2BFDDC"><enum>(3)</enum><header>Additional
equitable relief</header><text>The court may grant such additional equitable
relief, including any relief available under this title, as it deems necessary
to protect the interests of the public and of persons having claims for
benefits against the
plan.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H0DBBD9FC599445BDBB8EA3C787F328B"><enum>(c)</enum><header>Responsibility
for Claims Procedure</header><text>Section 503 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1133">29 U.S.C. 1133</external-xref>) is
amended by inserting <quote>(a) <header-in-text level="subsection" style="OLC">In general</header-in-text>.—</quote> before <quote>In
accordance</quote>, and by adding at the end the following new
subsection:</text>
<quoted-block id="HDAD6CA18457D476100CAE4C0B4A83049" style="OLC">
<subsection id="H17677F767A17404EB600281114BB1EAD"><enum>(b)</enum><header>Association
Health Plans</header><text>The terms of each association health plan which is
or has been certified under part 8 shall require the board of trustees or the
named fiduciary (as applicable) to ensure that the requirements of this section
are met in connection with claims filed under the
plan.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H1998819A434545FB9498E1E5EBE8CA2"><enum>104.</enum><header>Cooperation
between Federal and State authorities</header><text display-inline="no-display-inline">Section 506 of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1136">29 U.S.C. 1136</external-xref>) is amended by adding at the end the following
new subsection:</text>
<quoted-block act-name="Employee" id="H9C098109B92144D39B72CBF4922D2133" style="OLC">
<subsection id="HE705F7C2971E4E2B009CABF127FBFF35"><enum>(d)</enum><header>Consultation
With States With Respect to Association Health Plans</header>
<paragraph id="HD4D49FC773C34078B000350162F4BC7B"><enum>(1)</enum><header>Agreements with
states</header><text>The Secretary shall consult with the State recognized
under paragraph (2) with respect to an association health plan regarding the
exercise of—</text>
<subparagraph id="H21667E6CAD2A4E6C8E6B83B99CB7A68C"><enum>(A)</enum><text>the Secretary’s
authority under sections 502 and 504 to enforce the requirements for
certification under part 8; and</text>
</subparagraph><subparagraph id="H4F8AC04B27CB4443AFCAC6E7DB9503"><enum>(B)</enum><text>the Secretary’s
authority to certify association health plans under part 8 in accordance with
regulations of the Secretary applicable to certification under part 8.</text>
</subparagraph></paragraph><paragraph id="H83F5B84994974920AFAA4578346800A2"><enum>(2)</enum><header>Recognition of
primary domicile state</header><text>In carrying out paragraph (1), the
Secretary shall ensure that only one State will be recognized, with respect to
any particular association health plan, as the State with which consultation is
required. In carrying out this paragraph—</text>
<subparagraph id="H257B5A5137C14639B3DD5D73C757FF00"><enum>(A)</enum><text>in the case of a
plan which provides health insurance coverage (as defined in section
812(a)(3)), such State shall be the State with which filing and approval of a
policy type offered by the plan was initially obtained, and</text>
</subparagraph><subparagraph id="H62D6F9378EF747B78982525719791B47"><enum>(B)</enum><text>in any other case,
the Secretary shall take into account the places of residence of the
participants and beneficiaries under the plan and the State in which the trust
is
maintained.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HE7B128347B274987A128F77807E76EE6"><enum>105.</enum><header>Effective date
and transitional and other rules</header>
<subsection id="H0A6EBA923AB14376A52241151C5D4104"><enum>(a)</enum><header>Effective
Date</header><text>The amendments made by this Act shall take effect 1 year
after the date of the enactment of this Act. The Secretary of Labor shall first
issue all regulations necessary to carry out the amendments made by this Act
within 1 year after the date of the enactment of this Act.</text>
</subsection><subsection id="HEBFBBA86708B4EB2BEAA7EB1641FE3A0"><enum>(b)</enum><header>Treatment of
Certain Existing Health Benefits Programs</header>
<paragraph id="HD0E739BCF620444700410300BB1B837F"><enum>(1)</enum><header>In
general</header><text>In any case in which, as of the date of the enactment of
this Act, an arrangement is maintained in a State for the purpose of providing
benefits consisting of medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers make
contributions to such arrangement, such arrangement has been in existence for
at least 10 years, and such arrangement is licensed under the laws of one or
more States to provide such benefits to its participating employers, upon the
filing with the applicable authority (as defined in section 812(a)(5) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (as amended by this title)) by the arrangement of an
application for certification of the arrangement under part 8 of subtitle B of
title I of such Act—</text>
<subparagraph id="HBFC971F4001244AF90A200D4213194F8"><enum>(A)</enum><text>such arrangement
shall be deemed to be a group health plan for purposes of title I of such
Act;</text>
</subparagraph><subparagraph id="HA208953828374583835C1798A2B615FE"><enum>(B)</enum><text>the requirements
of sections 801(a) and 803(a) of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> shall be deemed met with
respect to such arrangement;</text>
</subparagraph><subparagraph id="H24A92DB309F74E4799BBB253FE482F99"><enum>(C)</enum><text>the requirements
of section 803(b) of such Act shall be deemed met, if the arrangement is
operated by a board of directors which—</text>
<clause id="HAF09CC3D7E2E4A20AD28432BC48226E0"><enum>(i)</enum><text>is
elected by the participating employers, with each employer having one vote;
and</text>
</clause><clause id="HDF893D5E7F2543548C117D676E27C9F4"><enum>(ii)</enum><text>has
complete fiscal control over the arrangement and which is responsible for all
operations of the arrangement;</text>
</clause></subparagraph><subparagraph id="H9FCA9DB6C18E437D9DE690BE7C47273E"><enum>(D)</enum><text>the requirements
of section 804(a) of such Act shall be deemed met with respect to such
arrangement; and</text>
</subparagraph><subparagraph id="HAFAA03238ED44025B1E929C495BFF4E0"><enum>(E)</enum><text>the arrangement
may be certified by any applicable authority with respect to its operations in
any State only if it operates in such State on the date of
certification.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">The
provisions of this subsection shall cease to apply with respect to any such
arrangement at such time after the date of the enactment of this Act as the
applicable requirements of this subsection are not met with respect to such
arrangement.</continuation-text></paragraph><paragraph id="H0343DB9072D044DC9981AE26BDA1E9E4"><enum>(2)</enum><header>Definitions</header><text>For
purposes of this subsection, the terms <term>group health plan</term>,
<term>medical care</term>, and <term>participating employer</term> shall have
the meanings provided in section 812 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name>, except that the reference in paragraph (7) of such section to
an <quote>association health plan</quote> shall be deemed a reference to an
arrangement referred to in this subsection.</text>
</paragraph></subsection></section><enum>II</enum><header>Extension of
increased expensing</header>
<section id="H32C6209B72C44188B982B3F6385172C5" section-type="subsequent-section"><enum>201.</enum><header>Extension of
increased expensing for small businesses</header><text display-inline="no-display-inline">Section 179 of the Internal Revenue Code of
1986 (relating to election to expense certain depreciable business assets) is
amended by striking <quote>2010</quote> each place it appears and inserting
<quote>2011</quote>.</text>
</section><enum>III</enum><header>Paperwork
requirements</header>
<section id="HAB79704E76FD4DB89DD1F58BEB683B01"><enum>301.</enum><header>Suspension of
fines for first-time paperwork violations by small business
concerns</header><text display-inline="no-display-inline">Section 3506 of title
44, United States Code (commonly referred to as the <quote>Paperwork Reduction
Act</quote>), is amended by adding at the end the following:</text>
<quoted-block id="HF40C19072EC14ABE98A34F5290581105" style="OLC">
<subsection id="HBAA5768F833D4A08BD1710DABE3EDE0"><enum>(j)</enum><header>Small
Businesses</header>
<paragraph id="H38480C66601E4957A1A1649BC5D678B6"><enum>(1)</enum><header>Small business
concern</header><text>In this subsection, the term <quote>small business
concern</quote> means a business concern that meets the requirements of section
3(a) of the Small Business Act (<external-xref legal-doc="usc" parsable-cite="usc/15/632">15 U.S.C. 632(a)</external-xref>) and the regulations
promulgated under that section.</text>
</paragraph><paragraph id="H7568E9DF520F4887BE88471C47962F00"><enum>(2)</enum><header>In
general</header><text>In the case of a first-time violation by a small business
concern of a requirement regarding the collection of information by an agency,
the head of such agency shall not impose a civil fine on the small business
concern unless the head of the agency determines that—</text>
<subparagraph id="H6CE610050CDB409691BBDAE513C8D73"><enum>(A)</enum><text>the violation has
the potential to cause serious harm to the public interest;</text>
</subparagraph><subparagraph id="HE25427A200354F4300002FCBFCF96C54"><enum>(B)</enum><text>failure to impose
a civil fine would impede or interfere with the detection of criminal
activity;</text>
</subparagraph><subparagraph id="H253DB3682D3C47E1A34B08C6755F0476"><enum>(C)</enum><text>the violation is a
violation of an internal revenue law or a law concerning the assessment or
collection of any tax, debt, revenue, or receipt;</text>
</subparagraph><subparagraph id="HE953ACAFC3C24AD9BBBF72E7D6EF90F0"><enum>(D)</enum><text>the violation was
not corrected on or before the date that is 6 months after the date of receipt
by the small business concern of notification of the violation in writing from
the agency; or</text>
</subparagraph><subparagraph id="H0601AAF5A3C34688B002AEBA9CAF5BD2"><enum>(E)</enum><text>except as provided
in paragraph (3), the violation presents a danger to the public health or
safety.</text>
</subparagraph></paragraph><paragraph id="HAD324BD3D5B64F60AA1F5462BCE6B188"><enum>(3)</enum><header>Danger to public
health or safety</header>
<subparagraph id="HFDCB64DFCB7947769F191FCFEB313D1"><enum>(A)</enum><header>In
general</header><text>In any case in which the head of an agency determines
under paragraph (2)(E) that a violation presents a danger to the public health
or safety, the head of the agency may, notwithstanding paragraph (2)(E),
determine not to impose a civil fine on the small business concern if the
violation is corrected not later than 24 hours after receipt by the small
business owner of notification of the violation in writing.</text>
</subparagraph><subparagraph id="HD679E4A25F0F41AABCA0B0C458C857D7"><enum>(B)</enum><header>Considerations</header><text>In
determining whether to provide a small business concern with 24 hours to
correct a violation under subparagraph (A), the head of the agency shall take
into account all of the facts and circumstances regarding the violation,
including—</text>
<clause id="HFC5FBFB627944C46BA9527625377EA6C"><enum>(i)</enum><text>the nature and
seriousness of the violation, including whether the violation is technical or
inadvertent or involves willful or criminal conduct;</text>
</clause><clause id="H45B24347D93C47240043F05DF316AC41"><enum>(ii)</enum><text>whether the small
business concern has made a good faith effort to comply with applicable laws
and to remedy the violation within the shortest practicable period of time;
and</text>
</clause><clause id="H55C873A62FC848229C242C53A36E06AF"><enum>(iii)</enum><text>whether the
small business concern has obtained a significant economic benefit from the
violation.</text>
</clause></subparagraph><subparagraph id="H8E85BA95D5AE4A5A83801276197B687E"><enum>(C)</enum><header>Notice to
congress</header><text>In any case in which the head of the agency imposes a
civil fine on a small business concern for a violation that presents a danger
to the public health or safety and does not provide the small business concern
with 24 hours to correct the violation under subparagraph (A), the head of the
agency shall notify Congress regarding such determination not later than the
date that is 60 days after the date that the civil fine is imposed by the
agency.</text>
</subparagraph></paragraph><paragraph id="H2AE719DCAB664ADEBC56A4057121EE64"><enum>(4)</enum><header>Limited to
first-time violations</header>
<subparagraph id="H4B1C0BC0238149DCB9238C205278A37E"><enum>(A)</enum><header>In
general</header><text>This subsection shall not apply to any violation by a
small business concern of a requirement regarding collection of information by
an agency if such small business concern previously violated any requirement
regarding collection of information by that agency.</text>
</subparagraph><subparagraph id="HE7BDC20B4A7C43828FAA49F2FDD2BC09"><enum>(B)</enum><header>Other
agencies</header><text>For purposes of making a determination under
subparagraph (A), the head of an agency shall not take into account any
violation of a requirement regarding collection of information by another
agency.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>IV</enum><header>Federal Rules of
Civil Procedure improvements</header>
<section id="H6C42121C2C514CD6A8DFABCB437E007F"><enum>401.</enum><header>Attorney
accountability</header><text display-inline="no-display-inline">Rule 11(c) of
the Federal Rules of Civil Procedure is amended—</text>
<paragraph id="HFAA1B23D4AA949E7BF27C2B963CD10C4"><enum>(1)</enum><text>by amending the
first sentence to read as follows: <quote>If a pleading, motion, or other paper
is signed in violation of this rule, the court, upon motion or upon its own
initiative, shall impose upon the attorney, law firm, or parties that have
violated this subdivision or are responsible for the violation, an appropriate
sanction, which may include an order to pay the other party or parties for the
reasonable expenses incurred as a direct result of the filing of the pleading,
motion, or other paper, that is the subject of the violation, including a
reasonable attorney's fee.</quote>;</text>
</paragraph><paragraph id="H69E1859AB06E40D49BE3D4A39CB27B95"><enum>(2)</enum><text>in paragraph
(1)(A)—</text>
<subparagraph id="H05D27EE91FAD43D1971B40CF07830056"><enum>(A)</enum><text>by striking
<quote>Rule 5</quote> and all that follows through <quote>corrected.</quote>
and inserting <quote>Rule 5.</quote>; and</text>
</subparagraph><subparagraph id="H5AC899D0E7094A82A465187887EB5791"><enum>(B)</enum><text>by striking
<quote>the court may award</quote> and inserting <quote>the court shall
award</quote>; and</text>
</subparagraph></paragraph><paragraph id="HF0CD40FE2B694AF8B6A2D2876964BF4D"><enum>(3)</enum><text>in paragraph (2),
by striking <quote>shall be limited to what is sufficient</quote> and all that
follows through the end of the paragraph (including subparagraphs (A) and (B))
and inserting <quote>shall be sufficient to deter repetition of such conduct or
comparable conduct by others similarly situated, and to compensate the parties
that were injured by such conduct. The sanction may consist of an order to pay
to the party or parties the amount of the reasonable expenses incurred as a
direct result of the filing of the pleading, motion, or other paper that is the
subject of the violation, including a reasonable attorney's
fee.</quote>.</text>
</paragraph></section><section id="H8CED87A832F246B988908F9D005343F3"><enum>402.</enum><header>Applicability
of Rule 11 to State cases affecting interstate commerce</header><text display-inline="no-display-inline">In any civil action in State court, the
court, upon motion, shall determine within 30 days after the filing of such
motion whether the action substantially affects interstate commerce. Such court
shall make such determination based on an assessment of the costs to the
interstate economy, including the loss of jobs, were the relief requested
granted. If the court determines such action substantially affects interstate
commerce, the provisions of Rule 11 of the Federal Rules of Civil Procedure
shall apply to such action.</text>
</section><section id="HAFF3BE408CB44423BE847FFC07BA7951"><enum>403.</enum><header>Prevention of
forum-shopping</header>
<subsection id="H825E68A056B5482D9BAB05BB9C8C981F"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to subsection
(b), a personal injury claim filed in State or Federal court may be filed only
in the State and, within that State, in the county (or if there is no State
court in the county, the nearest county where a court of general jurisdiction
is located), or Federal district in which—</text>
<paragraph id="H2F58A1E9DD744C6BA77B4B0974B0C46"><enum>(1)</enum><text>the person bringing
the claim, including an estate in the case of a decedent and a parent or
guardian in the case of a minor or incompetent—</text>
<subparagraph id="HA3D94B50D2D041F18BD900536C6225BF"><enum>(A)</enum><text>resides at the
time of filing; or</text>
</subparagraph><subparagraph id="HBC8EAE8ECFCC45EF8C8E66718D6F28C5"><enum>(B)</enum><text>resided at the
time of the alleged injury;</text>
</subparagraph></paragraph><paragraph id="H014C6CCA4C14451C9FD92FB0004081D9"><enum>(2)</enum><text>the alleged injury
or circumstances giving rise to the personal injury claim allegedly
occurred;</text>
</paragraph><paragraph id="HDA397D55CC0940B98EA02EC355CC07B3"><enum>(3)</enum><text>the defendant's
principal place of business is located, if the defendant is a corporation;
or</text>
</paragraph><paragraph id="H0A7B23B4E9B34ECCA1BC00125649ECA"><enum>(4)</enum><text>the defendant
resides, if the defendant is an individual.</text>
</paragraph></subsection><subsection id="H954BF5729BA940BCB4227FB7FB3F78BB"><enum>(b)</enum><header>Determination of
Most Appropriate Forum</header><text>If a person alleges that the injury or
circumstances giving rise to the personal injury claim occurred in more than
one county (or Federal district), the trial court shall determine which State
and county (or Federal district) is the most appropriate forum for the claim.
If the court determines that another forum would be the most appropriate forum
for a claim, the court shall dismiss the claim. Any otherwise applicable
statute of limitations shall be tolled beginning on the date the claim was
filed and ending on the date the claim is dismissed under this
subsection.</text>
</subsection><subsection id="H2AC30B7C70D54DE88858A9A5D892A4B6"><enum>(c)</enum><header>Definitions</header><text>In
this section:</text>
<paragraph id="HF0AF6294781148CCB5D8B3F200797439"><enum>(1)</enum><text>The term
<term>personal injury claim</term>—</text>
<subparagraph id="H045A534CFDE94080A03EA465ECB37768"><enum>(A)</enum><text>means a civil
action brought under State law by any person to recover for a person's personal
injury, illness, disease, death, mental or emotional injury, risk of disease,
or other injury, or the costs of medical monitoring or surveillance (to the
extent such claims are recognized under State law), including any derivative
action brought on behalf of any person on whose injury or risk of injury the
action is based by any representative party, including a spouse, parent, child,
or other relative of such person, a guardian, or an estate;</text>
</subparagraph><subparagraph id="H02E91017C3BD44B0AD00E3B9C4EA081"><enum>(B)</enum><text>does not include a
claim brought as a class action; and</text>
</subparagraph><subparagraph id="HA2F94F53C3174C88A8457384FC1BD566"><enum>(C)</enum><text>does not include a
claim against a debtor in a case pending under title 11 of the United States
Code that is a personal injury tort or wrongful death claim within the meaning
of <external-xref legal-doc="usc" parsable-cite="usc/28/157">section 157(b)(5)</external-xref> of title 28, United States Code.</text>
</subparagraph></paragraph><paragraph id="HFE097E3AAADD400AAFD0003C2B872C32"><enum>(2)</enum><text>The term
<term>person</term> means any individual, corporation, company, association,
firm, partnership, society, joint stock company, or any other entity, but not
any governmental entity.</text>
</paragraph><paragraph id="HF0E6D3164DAA43D98E04DBCB854C10B"><enum>(3)</enum><text>The term
<term>State</term> includes the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands, Guam, and any other territory or
possession of the United States.</text>
</paragraph></subsection><subsection id="H19B7370CFAD54373BA0044961E2B6956"><enum>(d)</enum><header>Applicability</header><text>This
section applies to any personal injury claim filed in Federal or State court on
or after the date of the enactment of this Act.</text>
</subsection></section><section id="HA45C7C1B36BD47A5B9F39296FD5D04D1"><enum>404.</enum><header>Rule of
construction</header><text display-inline="no-display-inline">Nothing in
section 402 or in the amendments made by section 401 shall be construed to bar
or impede the assertion or development of new claims or remedies under Federal,
State, or local civil rights law.</text>
</section><section id="H2D5FB8BDB70F46F5A0F4F298A397284C"><enum>405.</enum><header>Three-strikes
rule for suspending attorneys who commit multiple Rule 11 violations</header>
<subsection id="HADEE51BED1854A3FBED4BDDE1F81D13D"><enum>(a)</enum><header>Mandatory
Suspension</header><text display-inline="yes-display-inline">Whenever a Federal
district court determines that an attorney has violated Rule 11 of the Federal
Rules of Civil Procedure, the court shall determine the number of times that
the attorney has violated that rule in that Federal district court during that
attorney's career. If the court determines that the number is three or more,
the Federal district court—</text>
<paragraph id="H0A2E7F4832F74E14A610433BCEBFC9AA"><enum>(1)</enum><text>shall suspend that
attorney from the practice of law in that Federal district court for one year;
and</text>
</paragraph><paragraph id="HD90355D00B32450A992363643D1C5553"><enum>(2)</enum><text>may suspend that
attorney from the practice of law in that Federal district court for any
additional period that the court considers appropriate.</text>
</paragraph></subsection><subsection id="H84E84A644AA14C46A84D4270A0E9EE6F"><enum>(b)</enum><header>Appeal;
Stay</header><text>An attorney has the right to appeal a suspension under
subsection (a). While such an appeal is pending, the suspension shall be
stayed.</text>
</subsection><subsection id="H96736EEBC0DB4603BDA1885DA62196AD"><enum>(c)</enum><header>Reinstatement</header><text>To
be reinstated to the practice of law in a Federal district court after
completion of a suspension under subsection (a), the attorney involved must
first petition the court for reinstatement under such procedures and conditions
as the court may prescribe.</text>
</subsection></section><section id="H88F2D12AA27B45D4A3C78CA5E3906225"><enum>406.</enum><header>Presumption of
rule 11 violation for repeatedly relitigating same issue</header><text display-inline="no-display-inline">Whenever a party presents to a Federal court
a pleading, written motion, or other paper, that includes a claim or defense
that the party has already litigated and lost on the merits in any forum in
final decisions not subject to appeal on three consecutive occasions, and the
claim or defense, respectively, involves the same plaintiff and the same
defendant on each occasion, there shall be a rebuttable presumption that the
presentation of such paper is in violation of Rule 11 of the Federal Rules of
Civil Procedure.</text>
</section><section id="HD762DD9388304ED1B6D7B2A6E1ACE870"><enum>407.</enum><header>Enhanced
sanctions for document destruction in pending Federal court
proceedings</header><text display-inline="no-display-inline">Whoever willfully
and intentionally influences, obstructs, or impedes, or attempts to influence,
or obstruct, or impede, a pending Federal court proceeding through the willful
and intentional destruction of documents sought pursuant to the rules of such
Federal court proceeding and highly relevant to that proceeding—</text>
<paragraph id="HEEEBE93687CF446D8F233DA49351EA5D"><enum>(1)</enum><text>shall be punished
with mandatory civil sanctions of a degree commensurate with the civil
sanctions available under Rule 11 of the Federal Rules of Civil Procedure, in
addition to any other civil sanctions that otherwise apply;</text>
</paragraph><paragraph id="H19AA5999BE5D497CA9D2B83C93A6CB28"><enum>(2)</enum><text>shall be held in
contempt of court; and if an attorney, referred to one or more appropriate
State bar associations for disciplinary proceedings.</text>
</paragraph></section><section id="H3E03DE086F0A44BF844B70A88B368C71"><enum>408.</enum><header>Ban on
concealment of unlawful conduct</header>
<subsection id="H3F37CBB7DF534829B7C7D4CCCF972B16"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">In any Rule 11 of the
Federal Rules of Civil Procedure proceeding, a court may not order that a court
record not be disclosed unless the court makes a finding of fact that
identifies the interest that justifies the order and determines that interest
outweighs any interest in the public health and safety that the court
determines would be served by disclosing the court record.</text>
</subsection><subsection id="HD03950B192864F82996DF1BF6A1BCC"><enum>(b)</enum><header>Applicability</header><text>This
section applies to any record formally filed with a court, but shall not
include any records subject to—</text>
<paragraph id="HB9AF1C70019F41EEA515C38BA7F0151"><enum>(1)</enum><text>the attorney-client
privilege or any other privilege recognized under Federal or State law that
grants the right to prevent disclosure of certain information unless the
privilege has been waived; or</text>
</paragraph><paragraph id="H969FF500DE134668B3CBDEB3F2496F9D"><enum>(2)</enum><text>applicable State
or Federal laws that protect the confidentiality of crime victims, including
victims of sexual abuse.</text>
</paragraph></subsection></section><enum>V</enum><header>Awarding of
procurement contracts</header>
<section id="H113DB762E49D4AE8A34F00BFC6A0F1FB"><enum>501.</enum><header>Increase in
government-wide goal for procurement contracts awarded to small business
concerns</header><text display-inline="no-display-inline">Section 15(g)(1) of
the Small Business Act (<external-xref legal-doc="usc" parsable-cite="usc/15/644">15 U.S.C. 644(g)(1)</external-xref>) is amended by striking <quote>23
percent</quote> and inserting <quote>25 percent</quote>.</text>
</section>